QuadrigaCX cryptocurrency exchange is known to owe its customers C$190 million which it is unable to repay due to its inability to access such funds. To avert a situation of this nature from occurring in future, BitGo, a California based financial services company is offering $100 million insurance coverage for cryptocurrencies and other digitals assets stored with them.
$100 Million Insurance Coverage for all Cryptocurrencies Stored
In an announcement on February 19, BitGo stated that they are offering up to $100 million insurance protection for cryptocurrencies and digital assets held by the company. That being the case, a client who desires to safely store their virtual currencies without the fear of being hacked can take advantage of the coverage.
According to BitGo, custodial assets held by the company are insured through Lloyd’s, a London-based Insurance Specialist. The Cover can also be purchased through Digital Asset Services, an insurance provider that is regulated by the Financial Conduct Authority. Therefore, BitGo Business Wallet clients can either settle for a Theft Insurance or Lost Key Cover, if not both.
Insurance Covers Cases of Lost, Hacked or Stolen Private Keys
Furthermore, the publication outlines that in a case where a private key held by BitGo is hacked or stolen through a third party attack, then the insurance applies. The same goes if the hack or theft is carried out by an employee or there is a physical loss or damage of keys.
Mike Belshe, CEO and Co-founder of BitGo who commented on the development said it is the most complete insurance coverage offered in the crypto industry. He also acknowledged that it could sometimes be difficult for people to understand the circumstances and the extent to which their losses can be covered. Therefore, they have decided to innovate by being more transparent than other companies in terms of their coverage.
Likewise, Nicholas Edwards, Head of Fine Art & Specie, AmTrust at Lloyd’s said:
We have been working hard to tailor a bespoke insurance product for BitGo, in this new, rapidly developing and complex sector. Following a thorough review of BitGo’s security and controls
Insurance Coverage to Foster Trust
The new offer from BitGo will help to build confidence and trust among investors whose assets are stored and managed by BitGo. In an unforeseen event such as that of QuadrigaCX’s exchange or Cryptopia, people can still be compensated for their losses. BitGo also expects that this will encourage other companies in the industry to do the same in order to meet the complex and rapidly growing nature of the industry.