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From AI-assisted phishing to copyright suits, this edition of Risk Wrap highlights six developments shaping compliance, governance, and insurance exposure across high‑risk industries.
Google Sues AI Phishing-as-a-Service Operation After 1 Million Scam URLs Generated
Who’s liable when fraudsters use an AI model to create scam assets instead of writing the code themselves? Google’s lawsuit against Outsider Enterprise, filed on June 12, 2026, forces developers and users of AI systems to contemplate that question.
The case alleges that Outsider Enterprise used Gemini AI models to support a large-scale phishing operation. The scheme produced more than 9, IM000 fraudulent websites, over a million phishing URLs, and 2.5 million scam text messages within a period of two weeks in May 2026.
Google says the service operated on a subscription basis, allowing customers to generate fake login pages, delivery notifications, and bank alerts. The FBI seized about $100,000 in cryptocurrency connected to the operation.
Phishing-as-a-service is nothing new, but the use of AI enables fraudsters to generate new pages at a speed that detection systems may struggle to keep up with. As well as helping avoid detection, AI vastly reduces the cost of producing phishing assets.
Rather than waiting to become a defendant in another firm’s case, Google’s decision to file the lawsuit demonstrates the company to be taking action against misuse of its own technology. For buyers assessing AI vendors, evidence of abuse detection and security controls is increasingly becoming part of procurement processes.
Google is also supporting several proposed scam-prevention bills, including the National Strategy for Combating Scams Act, the Strategic Task Force on Scam Prevention Act, and the SCAM Act.
Google isn’t the only major AI company facing these challenges. In June 2026, Anthropic limited access to two of its newer models after identifying national security concerns related to potential jailbreak methods.
Implications for brokers and their clients:
- Consider cyber liability insurance that explicitly covers AI-related misuse and incident response.
- Firms relying on external AI functionality may review third-party cyber coverage to ensure it explicitly responds to AI-related threats.
- Investigate specialized AI insurance that’s designed to address these risks and others unique to the sector.
Source: Tech Insider (July 9, 2026). Google Sues AI Phishing Ring Tied to $1.9B in Losses [2026].
Emerging insurance industries mentioned: Artificial Intelligence Insurance.
Lines of business mentioned: Cyber Liability Insurance.
Crypto Exploits Reach Record Levels in H1 2026
The amount of crypto lost through exploits appears to be falling, yet attacks are becoming more frequent. New data from blockchain security platform Immunefi shows that the first half of 2026 saw 207 successful crypto attacks, the highest number ever to occur within a six-month period. Total losses reached $972 million.
According to Immunefi, the reduction in losses is partly due to bigger bug bounties, more frequent auditing of smart contracts, and better monitoring. However, vulnerabilities persist, with 837 detected by Immunefi during H1 2026. Attack methods are also getting more complex, with threat actors often combining multiple forms of manipulation into one attack. Crypto and financial services platforms are the main targets.
Implications for brokers and their clients:
- Consider digital asset crime insurance to protect against fraud and losses arising from sector-specific methods.
- Review cyber insurance policies to ensure web3-specific threat vectors are covered.
- Investigate dedicated fintech insurance to safeguard against claims arising from technology failures, cyber threats, professional liabilities, and regulatory risks.
Source: Coin Edition (July 10, 2026). Crypto Hacks Hit Record 207 Incidents in H1 2026, Losses $972M.
Emerging insurance industries mentioned: Fintech Insurance.
Lines of business mentioned: Cyber Liability Insurance, Digital Asset Crime Insurance.
Tornado Cash Case Reignites Questions Over Developer Liability
Should developers be liable when neutral software is used for unlawful purposes? The debate is reignited in light of Tornado Cash developer Alexey Pertsev’s appearance at Dutch Blockchain Week.
Pertsev was convicted of money laundering in 2024 after the detection of illicit activity through the protocol. He was sentenced to five years and four months in prison but was conditionally released in February 2025 while an appeal is being prepared.
Tornado Cash, an Ethereum-based protocol, is often described as a financial privacy tool that conceals the origin, ownership, and movement of crypto assets. Ethereum has pointed out that there are legitimate reasons for users to seek privacy. Users may not want their entire financial history to be viewable and may want certain donations to remain private, for example. It also reiterated that Tornado Cash is neutral and open source.
The court argues that there was a risk that illegally obtained assets would be moved using the protocol and emphasizes the lack of mechanisms to prevent suspicious activity. The appeal focuses on the decentralized nature of services like Tornado Cash and whether developers retain meaningful control after a system’s deployment.
This novel case may impact how European courts treat developers of decentralized applications in future.
Implications for brokers and their clients:
- Consider D&O and E&O insurance to address claims arising from management decisions and alleged negligence linked to the operation of decentralized platforms.
- Consider tech E&O insurance to protect against claims where compliance failures result from software faults and coding errors.
- Review regulatory defense coverage to ensure it applies to the digital asset sector and respond to investigations, enforcement proceedings, and legal costs arising from the evolving treatment of web3 technologies.
Source: Coin Edition (June 27, 2026). Ethereum Backs Alex Pertsev as Tornado Cash Appeal Revives Developer Liability Debate.
Lines of business mentioned: Directors and Officers Liability Insurance, Errors and Omissions Insurance, Tech E&O Insurance.
SEC Signals New Crypto Rules with Safe Harbor Proposals
The US SEC could introduce new cryptocurrency regulations this month, potentially creating safe harbors for certain digital asset activities. After release, the rules will be open for public comment.
Some consider this measure a sign that the “Regulation Crypto” proposal is on the path to being unveiled after months of discussion. Regulation Crypto is intended to provide clearer requirements for raising capital through digital assets, and to reduce regulatory uncertainty surrounding the custody and trading of tokenized securities on chain.
Potential protections could extend to some DeFi applications and tokenized securities. Previous comments by the SEC suggested safe harbors for early-stage crypto companies valued at up to $5 million during their first four years, entrepreneurs raising up to $75 million through some types of crypto investment contracts, and digital assets whose creators no longer perform a central managerial role.
Implications for brokers and their clients:
- Consider directors and officers insurance to protect executives against claims arising from regulatory scrutiny and investor disputes.
- Consider errors and omissions insurance to protect against claims of negligence, misrepresentation, or service failures related to digital asset transactions.
- Consider specialized digital asset insurance that covers custody risks, cyber incidents, private key loss, and other critical exposures.
Source: Bank Info Security (July 9, 2026). Cryptohack Roundup: US SEC Eyes July Crypto Rule Proposal.
Emerging insurance industries mentioned: Digital Asset and Web3 Insurance.
Lines of business mentioned: Directors and Officers Liability Insurance, Errors and Omissions Insurance
More Regulatory Changes Ahead for Finland’s Gambling Sector?
In an interview with iGaming Expert, Jari Vähänen, Co-Founder and Partner at The Finnish Gambling Consultants, discussed the possible challenges facing operators once licenses are granted.
He pointed to uncertainty surrounding the new regulatory framework, explaining that significant parts of it are open to interpretation by the regulator and that some questions are unlikely to be resolved until operations under the new law have started.
He also expects further legislative changes, suggesting a second phase of reform is highly likely before the end of the next government term. He stated that whether the rules are relaxed or tightened will largely depend on the market’s channelization rate and the prevalence of gambling problems. If more players move into the regulated market without a rise in gambling problems, he believes restrictions on affiliate marketing and potentially welcome bonuses could be eased.
The Finnish licensing application process opened in March, and nearly 50 applications have already been submitted. Vähänen estimates that the final number of applications will reach between 80 and 100. No licenses have been issued yet.
Implications for brokers and their clients:
- Review existing policies to ensure costs related to regulatory enforcement are covered.
- Consider obtaining business interruption insurance in case operations are suspended due to licensing issues, regulatory decisions, or other operational disruptions.
- Investigate specialized gambling insurance from providers that have expertise in evolving licensing regimes.
Source: iGaming Expert (July 6, 2026). Jari Vähänen: ‘Almost certain’ Finland gambling legislation is revisited.
Emerging insurance industries mentioned: Gambling Insurance.
Lines of business mentioned: Business Interruption Insurance
Google Hit with Another Copyright Lawsuit Over Gemini Training
Google is facing yet another class action lawsuit on the grounds of copyright, this time from a group of publishers and authors including Elsevier, Hachette, and S.C.R.I.B.E. The plaintiffs claim that Google tried to hide the fact that Gemini models were trained on copyrighted materials by removing copyright information on the works in question.
In two similar cases, courts favored the AI companies, referring to fair use rules. However, a case against Anthropic led to $1.5 billion class-action settlement. Many of the authors refused compensation so they could take further legal action against AI training.
According to the Google lawsuit, the plaintiffs have been providing Google with copyrighted works over the long-term with the purpose of making books searchable through the Google Books tool. The tool doesn’t let users view full books, only short sections alongside bibliographic details. The claim states that Google trained Gemini on copies of those books without permission, beyond the scope that had been agreed.
An internal document from Google was also cited, which allegedly says that using copyrighted materials in this way could be “highly problematic for Google” and could allegedly lead to anywhere from $10 billion to $100 billion in potential fines.
Implications for brokers and their clients:
- Review media liability insurance to ensure it covers AI-related Intellectual Property risks.
- Review tech E&O policies to ensure claims are covered where copyright infringement results from an alleged error, omission, or failure in the development or operation of AI systems.
- Review professional indemnity insurance to ensure claims are covered where copyright infringement is alleged to result from an error or negligent act in the development or deployment of AI systems.
Source: Tech Crunch (July 14, 2026). Google faces another AI training lawsuit from major publishers.
Lines of business mentioned, Media Errors and Emissions Insurance, Tech E&O Insurance, Errors and Omissions Insurance.
