On Wednesday, October 3, cryptocurrency exchange Gemini Trust Company, LLC made an official announcement of getting an insurance coverage for its custodian assets. Co-founded by Tyler and Cameron Winklevoss in 2014, the Gemini Trust company said that the insurance will be provided by a consortium of insurers led by global lending services firm Aon.
The official announcement notes that the exchange managed to convince Aon for this coverage after it proved the underwriters that it “is a leading, best-in-class exchange and custodian.” On successfully securing the insurance for its hot wallet, Head of Risk at GeminiTrust – Yusuf Hussain – wrote:
“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.”
This new insurance comes on the top of Federal Deposit Insurance Corporation which insures dollar deposits held by the Gemini exchange. Hussain in an additional statement said: “consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions.” He further added:
“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.”
Insurance Cover for Crypto Industry
Global insurers are not showing much interest in insuring the crypto industry especially considering the vulnerability of crypto exchanges to external attacks and hacks.
With multiple hacking events this year, the crypto industry has faced monumental losses of investor’s funds due to poor security standards. As a result, insurers are just not willing to provide the coverage or the premium is too high for exchanges to afford.
On the contrary, a Bloomberg report in July 2018 said that big names from the insurance industry like Chubb, AIG, Allianz and others are mulling out options to cover the crypto industry. Insurance broker Aon claims to already occupy 50 percent of the crypto-insurance market. Furthermore, it is also working on different crypto-specific protections that cater to this industry.
Another giant broker Marsh & McLennan claims to have formed a dedicated team developing broker policies for blockchain startups.
New Crypto Products and Investor Protection
Gemini has been taking several initiatives to bring new crypto products and services to its customers. Simultaneously, the exchange is also ensuring to create a conducive environment for investors to participate in the crypto market.
This year in April 2018, the exchange announced the launch of its crypto-block-trading service. This service was specifically targetted at institutional investors who want to buy or sell a large number of digital assets. Last month, the exchange also launched its dollar-pegged stablecoin Gemini Dollar.
In August, four cryptocurrency exchanges pledged support to Gemini’s proposal of creating a self-regulatory organization to develop new standards for the crypto industry. Dubbed as the Virtual Commodity Association Working Group, its main goal is to present rules, norms and regulations for the cryptocurrency and blockchain industry as well as to develop new regulatory standards for this sphere.
The crypto exchange also said that it will be employing Nasdaq’s SMARTS Market Surveillance technology to keep a tap and monitor all of its order books.