The Winklevoss brothers' Gemini exchange has set up an insurance company to prepare up to $ 200 million in insurance for Gemini Custody. According to reports, this is the largest amount of all cryptocurrency custody services in the world.
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Gemini's head of risk Hussain shared the news with Cointelegraph on January 16. The captive insurance company, called Nakamoto, Ltd., will get Gemini's custody business for up to $ 200 million.
Assisting Nakamoto, Ltd in launching are mainly traditional insurance brokers Aon and Marsh. According to reports, Gemini's escrow customers will also be able to purchase additional insurance from Nakamoto, Ltd. to ensure it can insure its own assets beyond $ 200 million.
Hussain said the expansion of the company's custody will allow many Gemini institutional customers to continue to meet their own regulatory requirements. He explained that the move "consistent with Gemini's approach, which is to be a safety first, compliance first, and regulatory friendly exchange and custodian."
Gemini first launched their hosting service last September.
Cryptocurrency industry insurance status
Insurance has been a major obstacle in the process of crypto investment services seeking to attract more traditional financial participants to hedge their risks.
Lloyd's, a London-based legendary insurance company, has been involved in the cryptocurrency industry, providing insurance services for hot wallets in the escrow business of Coinbase and Kingdom Trust.
Speaking of Gemini's history of covering insurance with cryptocurrency investments, Hussain pointed out that Gemini's move in 2018 was to cover insurance for hot wallet holdings, which is further evidence that they hope to provide greater security in the industry.
Gemini President Cameron Winklevoss said:
"Obtaining meaningful insurance in the crypto industry remains a challenge, and our services will help increase our insurance capabilities and propel the industry forward."
Ledger Vault, the escrow unit of hardware wallet maker Ledger, purchased a crime insurance policy against escrow assets through insurance company Arch Insurance Limited in November 2019. The insurance policy provides up to $ 150 million in crime loss insurance for user digital assets on the platform.