BitGo, a cryptosecurity company will be facilitating insurance for digital assets by providing $100 million of cover against theft or the loss of cryptographic keys via the Lloyd’s of London insurance market.
The announcement somehow makes all the more sense in the wake of the QuadrigaCX fiasco, where after the sudden death of its founder and CEO, Gerald Cotten, the exchange lost access to its cold storage wallets, as he was the only employee to know its private keys.
The insurance will include custodial assets held in BitGo business wallets or in its qualified custodian arm, BitGo Trust Company and will be covered against third-party hacks or the theft of private keys; insider theft by employees of private keys; and physical loss or damage of private keys, the company said.
Last year, BitGo stated that it was looking to secure insurance for its customers’ assets. BitGo named one of Lloyd’s underwriters involved – AmTrust. The cold storage of crypto assets is a natural fit for the so-called specie insurance market, which provides cover for things like vaulted bullion, art, and other treasures.
BitGo’s Lost Key Cover is being offered by Digital Asset Services, an insurance provider overseen by U.K. regulator the Financial Conduct Authority. Mike Belshe, CEO of BitGo, said in a statement that “this is the most complete insurance offering in the industry,” adding:
“It is not always easy for some clients to understand under what circumstances their investments are insured and to what extent their loss would be covered. We are changing that by being more transparent than any other company about the terms of our coverage. Transparency and accuracy is essential for building trust in the market.”
Nicholas Edwards, head of fine art & specie at AmTrust, added:
“We have been working hard to tailor a bespoke insurance product for BitGo, in this new, rapidly developing and complex sector.”
The BitGo’s security and controls were reviewed by AmTrust, offering the insurance product. BitGo added that its key recovery offering will be available for purchase either as an annual subscription or when needed. Digital Asset Services’ Theft Insurance is reportedly the first of its kind and will enable BitGo clients to get fully regulated specialist insurance for their digital currency holdings.
David Janczewski, CEO of Digital Asset Services, said the company was “delighted to pre-announce the launch of our specialist digital currency insurance and lost key cover.” he added:
“Our goal is to make digital currency safe and accessible to all by providing total peace of mind for anyone who is currently holding cryptocurrency, or anyone who might be on the outside looking in and just needs that extra bit of reassurance before investing.”
Also involved in brokering the deal were U.K. based crypto specialist broker Paragon International Insurance Brokers and Woodruff-Sawyer & Co.