Crypto security company BitGo is making good on plans to facilitate 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 comes in the wake of the QuadrigaCX debacle, where the exchange announced it could not access its cold storage wallets following the death of its founder and CEO, Gerald Cotten, as he was the only company employee to know its private keys.
Custodial assets held in BitGo business wallets or in its qualified custodian arm, BitGo Trust Company, 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.
BitGo said last year that it was looking to secure insurance for its customers’ assets.
In an unusual move, BitGo named one of the 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 customers 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.”
AmTrust reviewed BitGo’s security and controls prior to offering the insurance product, he added.
BitGo said 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.”
“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,” he added.
Also involved in brokering the deal were U.K. based crypto specialist broker Paragon International Insurance Brokers and Woodruff-Sawyer & Co.
Pic: Mike Belshe, CEO, BitGo at Consensus