The Gemini exchange insurance company was created by the Winklevoss brothers to protect their customers, they reported today.
The Gemini exchange, named that way because it was created by the twins Cameron and Tyler Winklevoss, created their own insurance company. According to the information, disseminated by several means in English, his idea is to “protect customers against the possible loss of coins from their offline vaults. The coverage limit is USD $200 million.
This insurance will be specifically for customers of Gemini Custody, the cryptographic cold storage service of Gemini Trust Company. Cold storage policies cover losses due to internal theft and collusion, as well as the destruction of private keys by natural disasters such as floods, earthquakes, etc. It is worth explaining, for non-connoisseurs, that cold storage refers to the practice of keeping cryptographic keys that control a crypto wallet offline, in a hardware device disconnected from the Internet or a piece of paper locked in a safe .
The media have applauded the news as they consider it another sign that the provision of insurance coverage that was once virtually impossible for crypto companies is growing, even if they have to create part of it. Last year, Coinbase also announced similar plans.
Possibly the largest insurance company
According to Gemini’s chief risk officer, Yusuf Hussain, this new insurance has “the largest insurance coverage limit currently available by any crypto custodian in the world.”
However, the crypto news media Coindesk notes that Coinbase has said it has a coverage of USD $255 million of assets held in online or hot wallets, but clarifies that Gemini’s new policy is for cold storage. Earlier, another insurance broker, Marsh’s Blue Vault, reported offering $150 million insurance for coins stored in cold storage.
Gemini’s captive insurance company was called “Nakamoto” by the last name of the pseudonym of the creator of Bitcoin, and is licensed by the Bermuda Monetary Authority (BMA). Of course: Nakamoto will ensure only Gemini customers, not competitors.
Nakamoto’s captive completes Gemini’s insurance triumvirate. First, customer deposits in US dollars are chosen for FDIC insurance (placed in third-party banks, including Silvergate compatible with cryptography) and covered up to USD $250,000. The second part came with an SOC2 security audit carried out by Deloitte, which allowed Gemini to obtain hot wallet coverage for funds held in the exchange.