The Gemini cryptocurrency exchange platform has managed to secure insurance for its customers’ cryptocurrency holdings.
The development should help the firm avoid the kind of hacks that have occurred against some of the industry’s other big names in recent years.
Gemini Ramps Up Security Measures for Crypto Custody
The news of Gemini’s new digital assets insurance was sent out via press release, as well as announced in a post on Medium.
The release states that the new security measures will be provided by a group of established insurers, which has been made possible by risk management specialists at Aon. It goes on to state that the conglomerate were willing to provide coverage for the Winklevoss-twin-owned exchange since it has proved itself a leading custodian of digital assets.
The supporting Medium post states that the exchange’s online hot wallet will be covered under the policy, before going on to say that the inclusion of digital asset insurance will complement the existing fiat fund coverage provided by the Federal Deposit Insurance Corporation (FDIC). It continues:
“This furthers our mission to build the future of money by bolstering our commitment to providing you with a safe and secure platform to buy, sell, and store your digital assets.”
Adequate custody is one of the factors that many believe is causing hesitancy amongst institutional investors wanting to enter the digital currency market. Gemini hopes its increased security measures will be able to alleviate many of these legitimate concerns from those who do not trust themselves to secure their own cryptocurrencies.
The post on Medium also states that many insurance companies have been reluctant to provide their services to the cryptocurrency industry. This is largely down to the frequency of cyber attacks that have seen their perpetrators make off with millions from various exchanges’ coffers. This, coupled with inadequate security measures from the platforms themselves, has encouraged insurers to steer clear of the space.
According to Yusuf Hussain, Gemini’s head of risk, the company was able to demonstrate sufficient security practices to allow insurance companies to provide the cryptocurrency held in the company’s hot wallet with coverage. Hussain concluded that the news was a boon for both the exchange and the wider space:
“Not only is this a tremendous win for Gemini customers but this is also a win for the broader crypto industry in furthering consumer protection. Onward and upward.”
Despite the bear market of 2018, the Gemini exchange continues to improve aspects of the underlying digital currency infrastructure.
It recently announced the launch of a stable coin designed to reduce reliance on the hugely controversial U.S. dollar Tether coin. Such upgrades should allow for greater investor confidence when the market finally turns and money begins to pour in as it did at the tail end of 2017.
Featured image from Shutterstock.
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