Web3 Risk And Regulation In Dubai: How OneInfinity Is Shaping The Future Of Digital Asset Insurance

Dubai has emerged as a global hub for Web3 innovation, attracting major players in the cryptocurrency, blockchain, and digital asset industries. As the sector grows, so do the associated risks, from cyberattacks to regulatory uncertainty. Ensuring the security and stability of digital assets has become a priority, leading to increased attention on risk management and regulatory frameworks.

OneInfinity, a specialised insurer for digital assets, is playing a key role in addressing these challenges. In collaboration with Dubai Insurance Company, OneInfinity provides custodial risk insurance to Virtual Asset Service Providers (VASPs), helping them mitigate financial and operational threats. Approved by the UAE’s Central Bank, this initiative marks a significant step toward strengthening Web3 security and governance in Dubai.

The Need for Web3 Risk Management

The rapid adoption of Web3 technologies has brought unprecedented opportunities, but also significant risks. Digital assets, including cryptocurrencies and tokenised real-world assets, are vulnerable to cyberattacks, fraud, and regulatory uncertainties.

A stark reminder of these vulnerabilities came with the recent Bybit security breach, which resulted in losses of $1.4 billion. Incidents like this highlight the need for robust security measures, compliance frameworks, and financial protection mechanisms such as insurance. Without these safeguards, investors, businesses, and regulators face heightened exposure to financial instability and legal complications.

VASPs, which provide essential services such as cryptocurrency exchanges, wallets, and digital asset custody, are particularly susceptible to cyber risks. A single breach can lead to significant financial losses and erode investor confidence. This is where digital asset insurance, such as OneInfinity’s custodial risk coverage, plays a crucial role in mitigating potential damage.

OneInfinity’s Role in Web3 Insurance

OneInfinity has positioned itself as a leader in providing insurance solutions tailored for digital assets. Since 2023, it has been operating in Dubai in partnership with Dubai Insurance Company, offering custodial risk insurance designed specifically for VASPs.

Its approval by the UAE’s Central Bank adds credibility to its offerings and underscores Dubai’s commitment to fostering a secure and regulated Web3 ecosystem. By covering potential financial losses due to cyber incidents, fraud, and operational failures, OneInfinity’s insurance solutions help VASPs maintain stability while complying with evolving regulations.

The company’s involvement goes beyond financial compensation—it also works closely with regulators, cybersecurity firms, and financial institutions to enhance risk management strategies. By integrating insurance with proactive security measures, OneInfinity contributes to a more resilient digital asset environment.

Dubai’s Regulatory Landscape for Web3

Dubai’s Virtual Assets Regulatory Authority (VARA) has been instrumental in shaping the region’s Web3 framework. The regulatory body oversees various aspects of digital asset operations, ensuring compliance with security and governance standards.

Key regulatory initiatives include:

• Oversight of digital asset custody – Ensuring that VASPs meet strict security and operational requirements.
• Tokenisation of real-world assets – Establishing guidelines for converting physical assets into digital tokens.
• Financial instrument compliance – Regulating investment products and risk management in the Web3 space.

Dubai’s Central Bank also plays a crucial role in financial risk management by endorsing insurance providers like OneInfinity. This collaborative approach between regulators, insurers, and industry players strengthens Dubai’s reputation as a secure destination for digital asset businesses.

The “Building Trust in Web3” Forum

Against the backdrop of increasing cyber threats, OneInfinity and Dubai Insurance organised the Building Trust in Web3 Forum, bringing together over 80 executives, regulators, and industry leaders. Representatives from VARA, Ripple, MANTRA, and Crystal Intelligence participated in discussions on security, compliance, and governance.

A major focus of the event was the Bybit security breach, one of the largest cryptocurrency losses in recent history. Experts analyzed how the attack occurred, strategies for tracing stolen assets, and the role of insurance in mitigating financial exposure. The forum also explored advancements in risk management, such as blockchain analytics for fraud detection and secure digital custody solutions.

The event reinforced the need for a multi-layered approach to Web3 security—combining regulatory oversight, technological solutions, and financial protection mechanisms like insurance.

The Future of Web3 Risk Management in Dubai

As Dubai continues to solidify its position as a leading Web3 hub, the importance of risk management will only grow. The integration of insurance into digital asset operations marks a significant shift in how the industry approaches security and financial stability.

Looking ahead, collaboration between insurers, regulators, and technology firms will be key to addressing emerging risks. Potential developments in the space include:

• Expansion of insurance products to cover broader categories of digital asset risks.
• Enhanced regulatory frameworks for Web3 businesses operating in Dubai.
• Greater use of AI and blockchain analytics to detect and prevent fraud in real time.

With strong regulatory backing and innovative risk management solutions, Dubai is setting a global standard for responsible Web3 development.

Conclusion

OneInfinity’s role in Dubai’s Web3 ecosystem underscores the growing importance of risk management in the digital asset space. By providing custodial risk insurance and working alongside regulators like VARA and the UAE Central Bank, OneInfinity is helping to create a more secure and compliant environment for VASPs.

The Building Trust in Web3 Forum highlighted the industry’s collective efforts to enhance security, particularly in response to high-profile cyber incidents like the Bybit breach. As Dubai continues to refine its regulatory approach and expand its risk management strategies, it remains a model for other jurisdictions looking to balance innovation with security in the Web3 era.

Ultimately, securing the future of digital assets will require a combination of regulation, technology, and financial protection. Dubai’s proactive approach ensures that Web3 businesses can thrive while maintaining trust and resilience in the face of evolving risks.

Author: Brett Hurll