Lloyd’s of London has provided Kingdom Trust with secured insurance coverage to protect the digital currency they store for investors against theft and destruction, the crypto storage firm announced.
“The move by Kingdom Trust, which has $12 billion in assets, is the latest example of a once-reticent insurance industry stepping up to offer protection to companies that store cryptocurrency, a volatile and loosely regulated, but rapidly growing business,” said Reuters.
READ MORE: Metlife Asia launches blockchain-powered insurance app for pregnant women
Kingdom Trust CEO Matt Jennings says his Kentucky-based firm, which is regulated as a trust company, has been trying to obtain insurance since it launched in 2010. He said they stepped up efforts to secure the protection this past year.
Qualified under US regulations
Kingdom Trust says on its website that it is qualified under US financial regulations to hold and store assets on behalf of investment advisers, securities brokers and retirement plans. It also states that it offers investors storage services for over 30 digital assets, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP) and ZenCash (Zcash).
READ MORE: UK in dark about cryptocurrency risks
“From the very beginning we saw insurance as a key factor to bring institutional investors into the marketplace,” Jennings says in an interview.
Reuters says a spokesperson for Lloyd’s, the largest insurance marketplace in the world, refused to comment.
According to Jennings, Kingdom Trust received the insurance coverage at a “drastic discount” because of its technology – a type of cold storage in which digital coins are stored offline away from the reach of hackers.
Most insurers in the crypto market avoid providing insurance coverage for cryptocurrencies stored online or in “hot storage” because of the high risk of hacking and will only cover offline storage.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.