Wednesday, 27 May 2020

Coinbase Holds $225 Mln Insurance Coverage For Cryptocurrency Hot Wallets

Cryptocurrency exchange Coinbase revealed that it currently holds $225 million insurance coverage for hot wallets through a Lloyd's of London broker.

In an official blog post on insurance for Cryptocurrency, Coinbase's Chief Information Security Officer Philip Martin confirmed the coverage for its hot wallets, where the exchanges keep assets online and readily available for trading, but highly risky for hacks and theft.

San Francisco-based Coinbase reportedly holds less than 2 percent of customers' assets in hot wallets, while the remaining 98 percent are kept in cold storage, which are offline and could keep digital coins safe from hacking and virtual theft.

As per the blog post, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking. Coinbase said it secured first policy to address that risk at the end of 2013, and since then has continued to held an insurance policy covering cryptocurrency in hot storage systems. Coinbase said it interacts with the insurance marketplace in collaboration with its brokerage representative Aon, a Lloyd's registered broker .

The current hot wallet policy with a $255 million limit was placed by Aon and sourced from US and UK insurance companies, including certain Lloyd's of London syndicates.

"Policies are generally written to exchanges or custodians, not directly to the owners of cryptocurrency. We need a world where the ultimate owners of cryptocurrency are able to directly insure their assets stored with trustworthy, well-reviewed, transparent service providers," the exchange said.

source: RTT
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