Gemini cryptocurrency exchange, founded by the Winklevoss twins, has formed its own insurance company to insure its custody arm for $200 million.
The Winklevoss’ Gemini Exchange has launched an insurance company to cover up to $200 million for Gemini Custody — reportedly the largest amount for any crypto custody service in the world.
Head of risk at Gemini Yusuf Hussain shared the news with Cointelegraph on Jan. 16. The captive insurance company is called Nakamoto, Ltd. and will secure Gemini’s custody business for up to $200 million.
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 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.”
Gemini first launched their custody wing in September.
The state of insurance in crypto
Insurance has been a major barrier to crypto investment services looking to court more risk-averse traditional financial players.
Legendary insurance firm Lloyd’s of London has gotten involved, securing hot wallet holdings for Coinbase as well as Kingdom Trust’s custody business.
Speaking of Gemini’s history with advancing insurance into crypto investments, Hussain pointed to Gemini’s 2018 move to insure hot wallet holdings as further evidence of their desire to provide more security in the industry.
Gemini president Cameron Winklevoss stated, “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.”
Ledger Vault, the custody arm of hardware wallet manufacturer Ledger, acquired a crime insurance policy for custodied assets through insurance company Arch Insurance Limited in November 2019. The policy provides up to $150 million in crime loss coverage for users’ digital assets on the platform.
Additional reporting by Kollen Post
