Ether.fi Cash Protection Terms Cap the Whole Year at $5M
Ether.fi has published the full terms of the Cash Protection program, with an effective date of 4 September 2026. The product page has carried a $500,000 figure for a while. The addendum explains what sits behind it, and the answer is a pool rather than a guarantee.
Total capacity is $5,000,000, split into two layers. The first $3,000,000 is an Ether.fi treasury commitment, self-funded. The remaining $2,000,000 comes from an insurance policy on which Ether.fi is the named insured. Users are not insured persons, not beneficiaries, and cannot claim against that policy directly, which the addendum states outright. Whatever obligation exists runs from Ether.fi to the cardholder under the addendum alone.
The per-account cap and the program cap are different numbers
Per-account limits follow the membership ladder: $10,000 for Core, $50,000 for Luxe, $200,000 for Pinnacle and Business, and $500,000 for VIP. The level that counts is the one held at the time of the covered event, and accounts outside those levels are not eligible at all.
The ceiling that binds harder is the aggregate one. Payouts across all users from a single covered event cannot exceed $5,000,000, and where verified losses exceed that, each payout is cut pro rata by that user's share of total eligible losses. More restrictive still, the addendum says the aggregate cap is available once per annual program period in total, not per event, and does not reinstate. The first period runs from 4 September 2026 to 13 August 2027.
That makes the arithmetic blunt. Ten VIP accounts claiming their full $500,000 would exhaust the entire year, and a second incident in the same period would find nothing left. The $500,000 describes what one account can receive when the pool is intact, not what it can expect in a year where someone else has already claimed.
Only two contracts on Optimism are covered
A covered event is an unauthorized state transition in a scheduled smart contract, started by a third party, that moves assets out of a vault other than as an authorized signer directed or as the contract documents its own operation. As of the effective date the scheduled contracts are EtherFiSafe and CashModule, both deployed on Optimism, and Ether.fi may revise that list as deployments change.
The exclusion list is where most realistic losses land. Compromise of a private key, credentials, passkey or device is out. So are oracle failures including Chainlink feed errors and price function manipulation, exploits routed through any module other than CashModule, market losses, stablecoin de-pegs, yield shortfalls, anything on third-party protocols or bridges, assets that analytics providers flag as illicit, and chain-level or consensus failures affecting Optimism or Ethereum. What remains covered is a narrow band: a contract-level failure in two named contracts, with the user's own security intact.
One carve-out runs the other way. Deliberate theft by an Ether.fi employee using privileged access is excluded from the insurance layer but stays covered by the $3,000,000 first-loss commitment, subject to both caps.
Eligibility is checked at the moment of the incident, not at claim time
Four conditions have to hold when the covered event occurs, not when the claim is filed. The account must sit in an eligible membership level and be in good standing without having contributed to the exploit. It must pass sanctions and watchlist screening. The default Ether.fi recovery service has to be configured and active. And KYC must already be approved, with pending, expired, rejected or withdrawn verification explicitly disqualifying.
The recovery-service condition is the one most likely to catch someone out, because it is a setting rather than an event. An account that never enabled it, or disabled it at some point, fails the test retroactively, and there is no way to fix that after the loss.
Claims cost $100 unless Ether.fi finds you first
Ether.fi says it will generally try to identify affected accounts itself from onchain data, and accounts identified that way pay nothing. A user who reports an incident must do so within 10 days of the suspected event and pay a $100 processing fee before review begins. The fee is refunded in full if the claim is approved.
Losses are valued in dollars at the time of the covered event using the median price across major exchanges, and reimbursement is paid in USDC to a new vault, since the compromised one may be unusable. Payment follows within 60 days of verification, and accepting it assigns any recovery rights against the attacker to Ether.fi.
The two layers do not pay on the same schedule. The $3,000,000 first-loss commitment is payable regardless of where any insurer review stands. The $2,000,000 excess layer only pays after the insurer confirms the event falls inside the policy, and Ether.fi makes no representation that its insurer will agree or move quickly.
Anyone reading the Ether.fi Cash Card marketing alongside this should note one discrepancy: the membership comparison page still carries a line saying the program is not yet live with full terms to come, while the addendum gives a go-live date of 4 September 2026. Ether.fi has not reconciled the two.
Sources: Ether.fi Cash Protection Program addendum, Ether.fi membership comparison, X thread.
