Bitstamp, one of the largest crypto platforms in Europe, said it has secured an additional insurance policy through a global marketplace that covers users’ digital assets held in their wallets.
Announced Thursday, the insurer will offer a crime insurance product that safeguards the offline storage accounts, known as cold wallets, against theft or direct loss.
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Bitstamp named the underwriters involved in brokering the deal. UK crypto specialist broker, Paragon International Insurance Brokers and Woodruff-Sawyer & Co. arranged the insurance policy from Lloyd’s of London.
While traditional institutions are shying away from cryptocurrencies and related assets, many firms working in digital assets managed to obtain its insurance coverage from the prestigious Lloyd’s of London, one of the oldest insurance agencies in the world, with centuries of experience in this industry.
Insurance is scarce for digital assets held at custodians or exchanges, but the insurance industry has gradually responded to demand starting with cover for cold storage.
Cryptocurrency wallets are attractive to hackers as they have a centralized single point of failure, making them prone to the same security issues faced by millions of web applications globally.
$100 Million in Crypto Insurance
Bitstamp already stores 98% of its digital assets offline with BitGo, which secures its wallets against hacks, insider theft by employees, and loss of keys needed to unlock the funds. BitGo already allows its users to cover up to $100 million worth of their digital assets held in their accounts with the blockchain security firm.
With the new insurance policy, Bitstamp offers an additional layer of protection that covers crime-related cases, such as employee theft, loss while the assets are stored at any premises, loss in transit, loss caused by computer fraud or funds transfer fraud, and loss related to legal fees and expenses.
“Introducing an additional crime insurance policy allows us to expand coverage to the assets held at Bitstamp and to protect our customers in a large array of scenarios they may find themselves in,” said Miha Grčar, Global Head of Business Development at Bitstamp.
BitGo’s patent multi-signature wallet technology has attracted crypto exchanges because it offers an enterprise-grade custody service for their assets as well as application programming interface access to its underlying security platform. BitGo’s multi-sig e-wallets require a transaction to have two or more signatures before it can be executed, a security layer that reduces the risk of fraud.