Gemini has secured insurance coverage for the digital assets it holds in custody. US-based cryptocurrency exchange, founded by entrepreneur twins Cameron and Tyler Winklevoss, said in a blog poston Wednesday the new security measures would be provided by a global consortium of insurers and arranged by Aon, a professional services company offering risk, retirement, and health management solutions.
According to the statement, many insurers have been reluctant to work with cryptocurrency companies due to a large number of high-profile hacks and poor security standards at the platforms themselves. As a result, many digital asset exchanges and custodians have been denied insurance services or have been deterred by the high cost of premiums required by the few insurers willing to back their holdings.
Gemini noted that its conglomerate of underwriters provided coverage for its hot wallet holdings after the platform proved it “is a leading, best-in-class exchange and custodian.”
The insurance coverage will complement the already available US dollar fund coverage provided by the Federal Deposit Insurance Corporation (FDIC). Gemini said the additional asset backing furthers its mission to “build the future of money” by bolstering its commitment to provide a safe and secure trading platform.
“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,” said Yusuf Hussain, Gemini’s head of risk.
The news comes less than a month after Gemini issued a stablecoin pegged to the US dollar. The Gemini Dollar (GUSD) is built on Ethereum’s ERC20 standard and has all the necessary approvals from the New York Department of Financial Services (NYDFS).