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Gemini Launches Crypto Insurance Company with $200 Million Coverage

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Gemini

Gemini

New York-based crypto-asset exchange Gemini has announced an increase in insurance coverage of its custody platform. The cryptocurrency exchange has increased its custody limit to $200 million. This is the largest cold storage insurance limit for any exchange globally.

Gemini Launches Insurance Company

This move indicates that Gemini Custody expects the demand for its services to increase. Considering the new coverage and the exchange’s reservation for accredited investors, it seems to now want to target large crypto holders in the future.

The company is positioning itself to serve high-end crypto investors in the future with the launch of the new captive insurance company Nakamoto Ltd. The Bermuda Monetary Authority has licensed the captive insurance company. Captive insurance is a form of “self-insurance,” and the idea is to offer insurance for Gemini Custody customer funds to a limit of up to $200 million.

Gemini president Cameron Winklevoss said that the lack of insurance cover for crypto assets is the main reason the cryptocurrency industry has not received mainstream adoption. As a result, Gemini has created a captive insurance firm that will address this and offer coverage for crypto assets.

Winklevoss further added that getting meaningful insurance in the cryptocurrency industry has been a big challenge. However, Gemini’s captive insurance will help enhance the exchange’s capacity and take the industry to the next level.

Nakamoto to Offer More Crypto Coverage

Besides offering cold storage insurance, the exchange will also offer various other types of coverage. This includes the offering of hot wallet insurance and segregated crypto assets.

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Nakamoto Ltd is a venture with insurance brokers, Aon and Marsh. Because it will benefit from experienced partners in the industry, Gemini indicates that it will manage to tap into more insurance markets and offer high-level insurance coverage at affordable costs.

Insurance for crypto has been a challenge because of cyberattacks, hacks, thefts, and the volatility of the industry. As a result, most crypto exchanges have sought to offer their clients in-house insurance options. Gemini’s new crypto insurance will offer the kind of risk protection investors are familiar with.

Featured image: DepositPhotos © maloha13

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Crypto Insurance Market to Get Boost in Coming Years

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crypto insurance

crypto insurance

Around a decade ago, something called crypto insurance would have drawn puzzlement from everyone. The creation of crypto exchanges made it possible for millions of people all over the world to buy crypto tokens with ease.

Key Analysis

However, the creation of exchanges also drew the attention of hackers, who have, over the years, made away with billions of dollars worth of cryptocurrencies. It is something that has dogged crypto exchanges for many years, and it seems that some of the world’s biggest insurers have finally come up with a solution. It has emerged that Aon and the legendary insurance firm Lloyd’s of London are all set to enter the crypto insurance market.

The cryptocurrency market is currently valued at $300 billion, and its value is only expected to rise in the years to come. Hence, crypto insurance is an idea whose time has come. Lloyd’s of London is a company worth $45 billion and remains the biggest insurance broker in the world. It connects clients to insurers. In 2019 alone, Lloyd’s brokered the $255 million insurance value for crypto exchange giant Coinbase and also the $100 million policy that belonged to BitGo. Aon, the second-biggest insurance broker in the world and rival of Lloyd’s, was also part of the Coinbase deal.

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Over the years, cryptocurrency exchanges have become increasingly vulnerable to attacks from hackers, and to date, as much as $460 million worth of crypto tokens have been stolen. Binance, the world’s biggest crypto exchange by trading volume, was a victim of a hacking attack earlier in 2019 and lost $40 million. It is important to note that Binance is well known for being one of the most secure platforms and the hack on the platform created a lot of panic in the crypto space. However, the insurance companies are raking it in as the crypto space keeps growing. An expert stated that crypto insurance pays out anything between $200 million and $500 million in premiums to the various insurance companies.

Featured image: DepositPhotos © tashatuvango

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