Cryptocurrency exchange Bittrex has announced that it got insurance coverage worth $300 million for the cryptocurrencies it holds.
The move is aimed at safeguarding the digital assets held in the company’s cold storage system. Cold storage means that the private keys are stored on a hardware not connected to the Internet.
Bittrex’s scheme was developed by the insurance firm Marsh and was followed by Lloyd’s Arch Syndicate in 2012.
“We have been approved for the coverage after successfully demonstrating the exchange’s extensive internal security and compliance protocols,” the company said in a release.
Sarah Downey, Marsh D&O Product Leader, said:
“We worked closely with Bittrex to create a tailored insurance solution to fit their specific cryptocurrency needs.”
Bittrex has obtained the insurance coverage after proving its internal security and compliance procedures.
Bittrex CEO Bill Shihara said:
“Insurance is another layer on top of actual exchange security that provides an additional guarantee for customers.”
Providing insurance coverage for crypto business is significantly difficult because of the high risk of managing digital assets.
Earlier this month, Gemini, a New York-based digital currency exchange, has announced launching a new insurance firm named “Nakamoto” to provide insurance coverage for nearly $200 million in digital assets.
Cameron Winklevoss, president of Gemini, said:
“Insurance is one of the main barriers to crypto mass adoption, and via Nakamoto the firm plans to address the issue. Obtaining meaningful insurance in the crypto industry remains a challenge, and our captive will help to increase our insurance capacity and move the industry forward.”
Cryptolydian earlier reported that Gemini has finished a second-level security evaluation by auditing giant Deloitte.
The company had completed Deloitte’s first-level security evaluation in 2019. This reflects the exchange’s keenness to comply with security measures, especially as it aims to boost its customer confidence.
The evaluation included the company’s trading platform and custody services.