BitGo's $700 million crypto custody insurance program

in cryptoblurt •  17 days ago 

BitGo is the company that manages the custodial wallets of many institutions, including some exchanges and DeFi platforms.

Those of you who are earning BCH on noise.cash may have noticed some people using Nexo to collect their micro-BCH and then transfer them once a month to another wallet, thereby accumulating those coins at zero fees. Well, Nexo uses BitGo and hence make the claim that their funds are insured up to $100m.

The news is that this insurance has now increased to $700m, although I have not checked if or when this may apply to Nexo in particular.

This article has a good overview of insurance in general and the problems arising from using standard insurance markets when underwriters evaluate risks related to cryptocurrencies.

The author concludes:

To me, the story is this: when very conservative insurance underwriters are willing to write this much insurance for digital asset risks, cryptocurrency has gone mainstream. It also makes it much easier for regulated institutions, like trust companies, to hold digital assets for their customers and comply with applicable regulatory and fiduciary obligations. These are necessary rails to make digital assets like bitcoin usable on both Wall Street and Main Street.

However, worth noting that $700m is a drop in a trillion-dollar ocean. But still... should make some waves.

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