- Gemini says the new insurance coverage for cryptos complements the existing FDIC ‘pass through’ deposit insurance that covers users’ fiat money.
- The move marks a major milestone for both Gemini and the cryptocurrency industry at large.
Gemini Trust Company, LLC, a regulated U.S-based cryptocurrency exchange and trading venue, has announced that it has successfully secured insurance coverage for clients’ digital assets stored in its hot wallet, according to a blog post on October 3, 2018.
Gemini Blazing the Trail
Gemini, one of the highly reputed U.S-based cryptocurrency exchanges, has secured insurance coverage for cryptocurrency traders funds stored in its hot wallet.
Per the team, Gemini successfully passed through a ‘series of due diligence’ with the insurers and secured a deal.
At current, Gemini has not revealed the entire details of the insurance coverage or mentioned any specific firm.
“…We were able to demonstrate to insurers that Gemini is indeed a safe and secure exchange and digital assets custodian where customers can buy, sell, and store digital assets in a regulated, secure, and compliant manner,” wrote Yusuf Hussain, Head of Risk at Gemini Trust.
A Remarkable Achievement for Gemini and Cryptos
At a time when a vast majority of established insurance corporations prefer not to provide insurance coverage for distributed ledger technology (DLT) powered virtual currency exchanges, due to the seemingly unregulated nature of the crypto industry.
And most bitcoin trading venues store a considerable part of customers’ funds in a hot wallet or online cryptocurrency wallets without adequately securing their platforms.
It is worthy of note that since the invention of bitcoin by Satoshi Nakamoto, cryptocurrency exchanges have been a target for rogue actors.
Earlier in January 2018, cryptocriminals were able to break into the hot wallet of Japan’s Coincheck exchange, stealing more than half a billion United States dollars.
Most recently, Tech Bureau’s Zaif cryptocurrency exchange also fell victim to cryptocriminals, and $60 million worth of bitcoin and altcoins was carted away from its online wallet.
Established in 2015 by bitcoin big whales and die hard hodlers, Tyler and Cameron Winklevoss, Gemini is remarkably one of the first cryptocurrency exchange to get an official license for trading bitcoin and ether in the United States.
Gemini digital assets platform is regulated as a trust company by the New York State Department of Financial Services (NYSDFS).
Importantly, Gemini’s insurance coverage for bitcoin and other digital assets is a significant milestone for both the company and the entire cryptospace, as only a few firms have achieved this feat to date.
As reported by Blockchain Reporter earlier in August 2018, Kingdom Trust cryptocurrency custodian obtained insurance package from the highly reputed Lloyd’s of London.