We have now another crypto custodian claiming that it has procured a crypto insurance coverage that is better than its competitors.
In a blog post, Nathan McCauley, Co-founder and CEO of Anchorage, says it has a fully insured solution for storing digital assets for institutions and investors.
Anchorage asserts that most custodian’s architecture forces a trade-off between security and usability, resulting in risk variations which is then reflected in the type of insurance they secure. For instance, one custodian may have a specie insurance that covers assets in cold storage, which doesn’t cover third party hacks and losses due to compromised key generation and transaction processes. Another custodian may have a crime insurance that covers assets in transaction, which focuses on hot wallet holdings instead of cold storage.
Investors don’t face such trade-offs in Anchorage. Their solution is built on a new technology which goes beyond cold storage to enable online transactions with offline assets. Consequently, Anchorage was able to work with their insurance broker and insurers to draft a new insurance policy which covers digital assets under custody end-to-end throughout their entire life cycle.
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If institutional investors are to adopt cryptocurrencies on a wider scale then crypto insurance policies must be made available at reasonable prices with adequate coverage. We see more and more such insurance policies being secured by exchanges and custodians, which is a positive sign.