Cryptocurrency exchange and custodian firm, Gemini Exchange or Gemini Trust Company, LLC, launched Nakamoto, Ltd. last Wednesday, January 16, 2020. Nakamoto, Ltd. is a captive insurer designed to insure Gemini Custody.
The crypto exchange business currently offers coverage for customer crypto in relation to its Hot Wallet offerings, notes Forbes. Apart from this, the company is also providing customers with the chance to buy, sell, trade, and store cryptocurrency assets.
According to the press release of Gemini, Nakamoto is considered as the “world’s first captive to insure crypto custody.” Under this, the crypto exchange firm is reportedly allowed to secure $200 million in coverage, with Nakamoto will only insuring partners, clients, and customers of Gemini.
The establishment of Nakamoto Ltd. comes as the parent company acknowledges the lack of coverage and policies geared towards the cryptocurrency sector. Yusuf Hussain, Head of Risk of the cryptocurrency exchange and custodian firm said, “Currently, the crypto industry lacks insurance coverage similar to that available in traditional financial markets. Gemini recognized this gap and collaborated with two of the world’s largest insurance brokers, Aon and Marsh, to solve for this.”
In an interview with Forbes, Hussain also said that there was a lack of industry data and information about risks involved in the industry. This is why their company decided to take on the captive route because they understand the risks required in the field.
Bloomberg Law states that Nakamoto Ltd. is managed by Aon Plc, a broker, to help provide the biggest coverage purchased by a custodian. Under this partnership, the company intends to expand its reach and provide more coverage and policies to a wide range of markets.
In a statement, company President Cameron Winklevoss said, “Insurance is one of the main barriers to crypto mass adoption. Gemini has created a captive insurance company to address this. Obtaining meaningful insurance in the crypto industry remains a challenge, and our captive will help to increase our insurance capacity and move the industry forward.”