Cryptocurrency exchange Bittrex obtained $300 million in digital asset insurance against theft or collusion for the cryptocurrency it holds in cold storage.
Bittrex announced in a blog post on Jan. 29 that the exchange obtained specialty insurance for corporations by insurance firm Lloyd’s of London after working with major insurance broker and adviser Marsh. The co-leader of Marsh’s digital asset risk transfer team, Sarah Downey, said, “We worked closely with Bittrex to create a tailored insurance solution to fit their specific cryptocurrency needs.”
This is not the first crypto deal for Lloyd’s, as in late August 2018 the firm started insuring crypto custodian Kingdom Trust. In April 2019, the company also started insuring the hot wallets of crypto exchange Coinbase.
Insurance in the cryptocurrency industry
Bittrex reportedly obtained the insurance after demonstrating its internal security and compliance protocols. The exchange’s CEO Bill Shihara explained that insurance is another layer on top of actual exchange security that provides an additional guarantee for its customers.
Insuring cryptocurrency businesses is notoriously hard because of the high risk of managing crypto assets. Earlier this month, an executive at the Winklevoss’ Gemini Exchange told Cointelegraph that the firm has launched its own insurance company to cover up to $200 million in assets for its custody solution.
An analysis article recently published by Cointelegraph explains that insurance in the cryptocurrency space is a prerequisite to attracting more institutional investors. In the case of Gemini, it is believed that the new insurance will help the exchange meet the regulatory requirements of institutional clients.