Gemini Gets Insurance Coverage For Its Digital Assets Custody
Popular cryptocurrency exchange Gemini has now secured all the digital assets stored in its custody through an insurance cover. The security cover is provided by a consortium of global insurers led by Aon, a professional lending firm which provides "a broad range of risk, retirement and health solutions.”
Head of Risk at the Gemini Trust Company, Yusuf Hussain said in a blog post: “This furthers our mission to build the future of money by bolstering our commitment to providing you with a safe and secure platform to buy, sell, and store your digital assets.”
Before getting this insurance cover, Gemini had to prove the underwriters that it "is a leading, best-in-class exchange and custodian.” Hussain said that “we were able to successfully demonstrate to insurers that Gemini, a New York trust company, is indeed a safe and secure exchange and custodian where customers can buy, sell, and store digital assets in a regulated, secure, and compliant manner.”
Insurance service providers have been hesitant to secure funds of exchanges owing to the vulnerability of external threats and hacks. This year itself in 2018, a number of exchanges have reported loss of millions-of-dollars of investors’ funds as a result of hacking attacks. Hence there have been serious doubts on the quality of security provided by the centralized exchanges.
On the other hand, few players willing to provide insurance cover to crypto firms are charging hefty premiums. According to a Bloomberg report in July, global insurance players like were working on products for the crypto industry.
Insurance broker Aon claims that it has already captured 50% of the crypto industry while other giant Marsh & McLennan has also formed a 10-member dedicated team to serve the blockchain startups.
The latest insurance cover obtained by Gemini is above the Federal Deposit Insurance Corporation-insured dollar deposits that the exchange holds. In a word with BusinessWire, Hussain said: “Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions. Educating our insurers not only allows us to provide such protections to our customers, but it also sets the expectation for consumer protection across the crypto industry.”
In the past, Gemini cryptocurrency exchange has taken several measures to bolster investor security. In April 2018, the company announced using Nasdaq’s SMARTS surveillance technology to monitor Bitcoin (BTC) and Ethereum (ETH) crypto pairs with the main objective of identifying and discouraging market manipulation.
Recently, the exchange also announced the launch of its own USD-pegged stablecoin Gemini Dollar which is approved and regulated by the New York Department of Financial Services (NYDFS).