Since the ongoing Quadriga CX wallet saga, a digital asset custodian service, BitGo, has taken to offering insurance policies to guard investors against facing similar incidents.
BitGo is a major California-based custodian service backed by Goldman Sachs which handles some $2 billion worth in digital assets. According to Bloomberg, BitGo has obtained a policy worth as much as $100 million through Lloyd’s insurance marketplace to cover offline storage accounts, or cold wallets.
The policy will provide protection against hacker attacks, insider thefts, and loss of private keys – but the coverage only applies to funds under BitGo’s complete control. BitGo has no involvement with Quadriga.
Traditional bank deposits are usually insured to some degree, but this is not as common for crypto deposits, Bloomberg notes. While many crypto exchanges may offer some coverage, this usually pertains to only hot wallets. Insurance companies affiliated to Lloyd’s have been offering cold wallet insurance since 2014, but these have been limited in coverage.
“It’s a huge thing. We’ve had clients that wanted to see this before we finished their onboarding process. This gives them peace of mind,” BitGo CEO Mike Belshe stated.