BitGo, the digital asset custodian that expanded to other business areas, has bought an insurance cover of more than $700 million to protect its crypto holdings from any kind of external threats.
Announced on Wednesday, the crypto custodian company has added more than $600 million to its already existing $100 cover, which it bought in 2019. It has tapped Lloyd’s of London for its insurance requirements and partnered with insurance broker, Woodruff Sawyer.
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Coping Up with Institutional Demand
The upgradation of the insurance cover came as the institutional demand for cryptocurrencies is skyrocketing. From hedge funds to corporates, many major institutional players are now investing in crypto in some form or the other.
BitGo has already allowed its custodian clients to purchase their own dedicated excess limits above the company’s $100 million cover since last year, and the recent addition of the $600 million is an extension to that program.
“BitGo was one of the first service providers to build a strong insurance program for crypto,” BitGo CEO Mike Belshe said in a statement.
“Today, due to BitGo’s technology and scale, we’re able to offer a lower cost Dedicated Customer insurance program on top of BitGo’s secure cold storage system. This milestone demonstrates that the offering has been very popular with clients seeking the ultimate secure and insured storage.”
Receiving insurance cover for digital currencies is tough due to the unregulated nature of the industry and the cybersecurity risks. Still, many companies, like Crypto.com and Coinbase, have managed to get cover for hundreds of millions of dollars.
Meanwhile, BitGo has aggressively entered into other crypto business areas apart from its core custody business. Last year, the crypto company made a couple of acquisitions and launched lending and institutional brokerage services.
“As we see more institutional clients coming into crypto, it’s vital that we keep innovating to ensure that demand is met,” said Jacob Decker, Vice President and Director of financial institutions at Woodruff Sawyer.