Gemini announced during the week in a press release that the exchange has partnered with leading insurers to provide coverage on custodial digital assets.
Effective since October 1, 2018, insurance coverage is provided on digital assets held in Gemini's custodial service. Aon, a leading global professional services firm providing a broad range of risk, retirement and health solution, has arranged the partnerships "through a global consortium of industry-leading insurers."
Yusuf Hussain, Gemini’s Head of Risk, stated:
Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions. Educating our insurers not only allows us to provide such protections to our customers, but it also sets the expectation for consumer protection across the crypto industry.
Gemini has generated a lot of attention recently with the launch of new products and services. As CCN reported, the company launched a new stablecoin (GUSD) touted as more transparent and auditable than current coins. Additionally, the Gemini's Winklevoss twins are very active in bringing cryptocurrencies to Nasdaq and educating Wall Street.
A Record for Adding Legitimacy to Cryptocurrencies
The new addition of insurance-backed custodianship marks a clear trend that Gemini focuses on adding services that legitimize the cryptocurrency trading industry. Most of Gemini's developments bring features that are consistent with traditional financial institutions.
While the security behind cryptocurrency custodianship has firmed up greatly, such as multi-signature features, exchanges still want to firm up doubt with insurance for digital assets still highly sought after when exchange hacks are regular news. And as CCN reported, insurance firms could win big, and some are launching with specific cryptocurrency packages.
As the Gemini blog update states,
This furthers our mission to build the future of money by bolstering our commitment to providing you with a safe and secure platform to buy, sell, and store your digital assets. This new coverage complements existing FDIC “pass through” deposit insurance that your fiat funds (U.S. dollars) are eligible for.
As the red carpet is unfolding for institutional investors, despite critics who say this could be damaging to the principal of peer-to-peer money with decentralized control, exchanges want to leave no room for uncertainty for theft and regulation infractions.
Making a Case to Ease Insurers' Fears
Though some firms have dove into the digital asset space, others have been leery to join because of huge hacks and shady internal businesses practices at cryptocurrency exchanges.
However, the Winklevoss twins were able to ease firms' fears. According to Gemini's update: "...we were able to successfully demonstrate to insurers that Gemini, a New York trust company, is indeed a safe and secure exchange and custodian where customers can buy, sell, and store digital assets in a regulated, secure, and compliant manner."
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