Gemini crypto exchange secures insurance for digital assets after liaising with industry-leading insurers, the exchange announced today.
Underwriters finally accepted to honor Gemini’s request after the exchange was able to satisfactorily demonstrate that it’s the leading cryptocurrency exchange and custodian of digital currencies. The insurance will cover the crypto assets that the exchange holds in their ‘online hot wallet.’
Yusuf Hussain, Head of Risk, Gemini Trust LLC, commented that the advantages of acquiring an insurance policy for digital assets is a “tremendous win for Gemini customers but this is also a win for the broader crypto industry in furthering consumer protection.”
Hussain also noted that most of the insurers are wary of the massive cryptocurrency hacks that have left innocent crypto traders counting large losses. Additionally, insurers are not confident about the internal controls, procedures, policies, and security mechanisms employed by crypto exchanges.
This has led to virtual currency exchanges “unable to obtain insurance” or they have feared the “high cost of premiums” that the few bold insurers require. Luckily, Gemini was able to convince a global consortium of industry-leading insurers led by AoN that their systems are tough enough.
The new milestone covered by the exchange comes a few days after Gemini launched its stable value coin and which is taunted as the first in the world open to the scrutiny of financial regulators in the United States. The insurance will be adding to the Federal Deposit Insurance Corporation deposit insurance on their U.S dollars.
According to Yusuf, insured digital assets will help provide the transition from traditional finances to crypto by providing the “same levels of insured protection.”
As Gemini crypto exchange secures insurance for digital assets, do you think it will help more people get into crypto trading now that they know their digital wealth is insured?
Let us know your thoughts in the comments section below.