Cryptocurrency wallet and custodian BitGo has announced it obtained a policy of “Excess Specie Insurance” through a global insurance marketplace, allowing its customers to purchase excess limits above its $100 million policy.
According to CoinDesk, the move is a sign of the continued maturation of the cryptocurrency insurance sector, as years ago custodians and large exchanges in the space struggled to secure insurance against the loss of cryptoassets.
Specialists have, however, been taking on more risk, with Lloyd’s of London providing the cryptocurrency custodian’s clients with a $100 million cover last month. The insurance policy is being arranged from the firm by brokers and risk advisers Woodruff-Sawyer & Co. and Paragon Brokers, and covers users’ cryptoassets held in cold wallets – wallets that aren’t connected to the internet.
Rodrigo Vicuna, BitGo’s CFO, revealed the firm has had a lot of demand from both small and large firms, adding:
There have been small exchanges looking for an extra $5 million or $10 million. We also have had requests for as high as a couple hundred million. It really just depends on the size of the client and how much financial backstop is right for them.
BitGo’s policy covers losses from insider theft, or from a third-party gaining physical access to the cold wallet. The first customer for BitGo’s new excess policy is the Hong Kong-based crypto financial services provider Crypto.com.
Its co-founder and CEO Kris Marszalek was quoted as saying:
BitGo carries a robust insurance program, elevating the scope of protection for our digital assets in their custody and providing further assurance to our customers that their funds are safe and protected.
In addition to the told wallet cover, BitGo also gives its customers the option to add hot wallet coverage, thanks to a partnership with U.K.-based Coincover, which is backed by Lloyd’s. It offers a crime policy covering third-party hacks.
David Janczewski, Coincover’s CEO, noted that Lloyd’s offers the policy on a case-by-case basis, with limits available for hot wallet cover being in the millions or “possible tens of millions.”