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.
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.
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