JUST IN: Crypto exchange @Gemini, led by the Winklevoss twins, has set up its own insurance company to cover potential loss of crypto in cold storage – with a possibly record-breaking $200 million limit.@IanAllison123 reports https://t.co/BpSt42UNrM — CoinDesk (@coindesk) January 16, 2020
On January 16, it has been reported that Yusuf Hussain, the Head of Risk at Gemini, has said that the captive insurance company is called Nakamoto, Ltd. and will secure Gemini’s custody business for up to $200 million.
However, by aiding Nakamoto, Ltd.’s launch were major traditional insurance brokers Aon and Marsh. Gemini’s custodial clients will also reportedly be able to purchase additional insurance from Nakamoto, Ltd. in order to secure their own holdings beyond the general $200 million.
Hussain said that the advancement in the company’s custodial coverage will allow a number of Gemini’s institutional clients to continue to meet their own regulatory requirements. He explained that the move “is consistent with Gemini’s approach of being a security-first, compliance-first, and regulatory friendly exchange and custodian.”
Insurance has been a major barrier to crypto investment services looking to court more risk-averse traditional financial players.
Likewise, Lloyd’s of London, the legendary insurance firm, has gotten involved, securing hot wallet holdings for Coinbase as well as Kingdom Trust’s custody business.
Thus, Cameron Winklevoss, the President of Gemini, said:
“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.”