> For the complete documentation index, see [llms.txt](https://etherfi.gitbook.io/etherfi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://etherfi.gitbook.io/etherfi/legal/ether.fi-legal/ether.fi-cash-protection-program.md).
# ether.fi Cash Protection Program
Effective Date: September 4, 2026
This Cash Protection Addendum (the “Addendum”) is incorporated into and forms part of the Ether.Fi SEZC Terms of Service. It sets out the terms of the Cash Protection program (the “Program”) provided by Ether.Fi SEZC (“Ether.Fi,” “we,” or “us”) to eligible Users. Except as expressly modified by this Addendum, the Terms of Use (including its governing law and dispute resolution provisions) applies to the Program in full.
The Program is not an insurance policy, and participation in the Program does not make you an insured, a beneficiary, or a third-party beneficiary of any insurance policy Ether.Fi maintains. Ether.Fi partially funds its obligations under the Program using a combination of its own committed capital and insurance Ether.Fi separately purchases for its own benefit. Users have no rights under, and cannot make claims directly against, any such insurance policy. Ether.Fi's rights and obligations to you exist solely under this Addendum.
The Program is not deposit insurance. It is not provided, administered, or backed by the FDIC, any government agency, or any government deposit insurance scheme in any jurisdiction, and it is not a guarantee of the value of your assets.
### 2. Program Capacity and Funding
Ether.Fi's aggregate reimbursement obligation under the Program is structured in two layers:
| Layer | Amount | Source |
| ---------------------- | ---------- | -------------------------------------------- |
| First Loss | $3,000,000 | Ether.Fi Treasury Commitment (self-funded) |
| Excess | $2,000,000 | Insurance Policy (Ether.Fi as named insured) |
| Total Program Capacity | $5,000,000 | Per Covered Event / Program Period |
#### 2.1 Per-Account Cap
The maximum amount reimbursable to any single account under the Program (the "Per-Account Cap") depends on the account's Membership Level at the time of the Covered Event: $10,000 for Core accounts, $50,000 for Luxe accounts, $200,000 for Pinnacle and Business accounts, and $500,000 for VIP accounts. The Per-Account Cap applies regardless of the value of assets actually lost. Accounts not in one of these Membership Levels are not eligible for reimbursement.
#### 2.2 Aggregate Cap and Pro-Rata Allocation
Total payouts across all Users arising from a single Covered Event (as defined in Section 3) will not exceed $5,000,000 (the “Event Aggregate Cap”). If the sum of all eligible, verified losses from a single Covered Event exceeds the Event Aggregate Cap, each User's payout will be reduced on a pro-rata basis, calculated as: (User's Eligible Loss ÷ Total Eligible Losses from the Covered Event) × $5,000,000, subject in all cases to the Per-Account Cap.
#### 2.3 Program Period Aggregate
The Event Aggregate Cap and any corresponding Per-Account Cap are fixed for each annual period (a “Program Period”), and does not reinstate. The first Program Period begins on the go-live date of September 4, 2026 and runs until August 13, 2027; all successive Program Periods shall run from August 14, 2027 for one (1) year periods thereafter. Program Periods run consecutively for so long as the Program remains in force under section 8.2. If the Program terminates or ceases to be in force prior to the end of a Program Period, that Program Period ends on the date the Program ceases to be in force. The Event Aggregate Cap and any Per-Account Cap are available once per Program Period in total, and not per event within that period, mirroring the fact that the excess insurance layer does not reinstate.
### 3. Covered Event
A “Covered Event” means:
An unauthorized state transition in a Scheduled Smart Contract, initiated by a third party, that causes assets to leave a User's vault other than as directed by an authorized signer or by the documented operation of the relevant Scheduled Smart Contract.
#### 3.1 Scheduled Smart Contracts
As of the Effective Date, the following are “Scheduled Smart Contracts” under the Program:
* EtherFiSafe (deployed on Optimism)
* CashModule (deployed on Optimism)
The Scheduled Smart Contracts may be updated by Ether.Fi from time to time to reflect new deployments or contract upgrades.
### 4. Eligibility
To be eligible for reimbursement under the Program, at the time of the Covered Event, a User's account must satisfy each of the following:
* Membership Level. The account must be in one of the eligible Membership Levels.
* Good standing. The account must be in good standing under the Terms of Service and must not itself be implicated in, or have contributed to, the exploit giving rise to the Covered Event.
* Screening. No payout will be made to a sanctioned person, to an account subject to sanctions or watchlist restrictions, or where payment would be prohibited by applicable law.
* Recovery enabled. The account must have the default ether.fi recovery service configured and active at the time of the Covered Event, as described at
* Identity Verification: The user must have completed and hold approved KYC verification with Ether.Fi at the time of the Covered Event. Accounts with pending, expired, rejected, or withdrawn verification at the time are not eligible.
### 5. Exclusions
The Program does not cover, and no reimbursement will be made for, losses arising from or related to:
* Compromise of a User's private key, credentials, passkey, or device;
* Oracle failures, including Chainlink feed failures and custom price function errors or manipulation;
* Exploits routed through any module other than CashModule, including arbitrary calls executed via other modules;
* Market or price losses, stablecoin de-peg events, or yield shortfalls;
* Losses on third-party protocols, bridges, or any system outside the Scheduled Smart Contracts;
* Assets flagged as illicit or sanctioned by blockchain analytics providers;
* War, chain-level or consensus-layer failures, or forks affecting Optimism or Ethereum;
Notwithstanding the foregoing, deliberate theft by an Ether.Fi employee using privileged access is excluded from the insurance layer described in Section 2, but is covered by Ether.Fi from its own $3,000,000 first-loss commitment, subject to the Per-Account Cap and Event Aggregate Cap.
### 6. Claims Process
#### 6.1 Notice
Ether.Fi will generally attempt to identify affected accounts itself using onchain data following a suspected Covered Event. Users may also report a suspected Covered Event by contacting within 10 days of the suspected Covered Event.
#### 6.2 Verification
Losses are verified using onchain data and blockchain analysis. Onchain state is authoritative for determining whether a Covered Event occurred and which accounts and assets were affected.
#### 6.3 Claim Processing Fee
A claim processing fee of USD $100 applies to each claim submitted under Section 6.1. The fee is payable by the User at the time of submission, by transfer to the payment details provided by Ether.Fi, and a claim will not be processed until the fee is received. The fee is refunded in full if the claim is approved. No fee applies where Ether.Fi identifies the affected account through its own investigation under Section 6.1 without a User-submitted claim.
#### 6.4 Valuation
The value of lost assets is calculated in U.S. dollars as of the time of the Covered Event, using the median price across major exchanges at the time of the Covered event.
#### 6.5 Payment
Verified reimbursements are paid in USDC (or its equivalent), to a new vault or account designated by the User, since the compromised vault may be unusable. Payment is made within 60 days following verification.
#### 6.6 Reservation of Rights Pending Insurer Confirmation
If upon its investigation Ether.Fi determines that a Covered Event has occurred, Ether.Fi's $3,000,000 first-loss commitment is payable to eligible Users regardless of the status of any insurer review. The $2,000,000 excess layer is payable only following confirmation from Ether.Fi's insurer that the Covered Event falls within the policy's terms. Ether.Fi will use commercially reasonable efforts to obtain that confirmation promptly and will keep affected Users informed of material developments affecting the excess layer. Notwithstanding the foregoing, [Ether.Fi](http://ether.fi) makes no representation, warranty, or guarantee that Ether.Fi’s insurer will designate any event as a Covered Event for purposes of the insurance policy, or otherwise payout any insurance policy in a timely manner.
#### 6.7 Subrogation and Cooperation
As a condition of receiving payment, a User assigns to Ether.Fi any recovery rights the User may have against the party responsible for the Covered Event, and agrees to cooperate with Ether.Fi's (and its insurer's) investigation. Amounts later recovered by Ether.Fi or its insurer in respect of a reimbursed loss flow back to Ether.Fi and/or its insurer as applicable, and do not create any further obligation to the User beyond the reimbursement already paid.
### 7. Program Administration
#### 7.1 Amendment and Termination
Ether.Fi may amend or terminate the Program prospectively, on notice published at ether.fi. Any Covered Event occurring while the Program was in force remains governed by the Program Terms in effect at the time of that Covered Event, notwithstanding any later amendment or termination.
#### 7.2 Term
The Program's term is tied to the term of Ether.Fi's excess insurance policy. The Program continues only for so long as, and on the terms that, this terms page states it is in force.
#### 7.3 Nature of the Payout Obligation
Reimbursement may be provided where the eligibility and Covered Event conditions in Sections 3–5 are satisfied, with Ether.Fi acting as the reasonable determiner of the underlying facts (e.g., whether a Covered Event occurred, verification of loss amount), and disputes over that determination resolved via arbitration under Section 27.e of the Terms of Use.
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