Gemini, a crypto-exchange and custodian owned by Internet entrepreneur twins Cameron and Tyler Winklevoss, launched a “Captive Insurance Company” or self-insurance company to provide Gemini Custody up to $200 million in insurance coverage for digital assets held by them on behalf of its clients.
The $200 million in insurance coverage for digital assets is claimed by the exchange as the largest custody insurance coverage in the crypto market.
The captive insurance company called Nakamoto, Ltd. is licensed by the Bermuda Monetary Authority (BMA) to insure Gemini Custody. It is also claimed as the world’s first captive to insure crypto custody.
The insurance company allows Gemini Custody to increase its insurance capacity beyond the coverage currently available in the commercial insurance market. It will also enable Gemini customers to purchase additional insurance for their segregated crypto assets.
In October last year, Gemini had secured insurance coverage for digital assets held on behalf of its clients in their online hot wallet. The insurance coverage was provided by a global consortium of industry-leading insurers and arranged by professional services firm Aon, which provides risk, retirement and health solutions.
Apart from this Hot Wallet insurance coverage, U.S. dollar deposits held at Gemini are eligible for “pass through” deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC).
Gemini Custody is regulated by the New York State Department of Financial Services (NYDFS) and is SOC 2 Type 1 compliant.
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