Although crypto space has been growing and developing at an impressively rapid rate it is still a stretch to say that the crypto space is well established. The adoption rates and problems of legalizing crypto are one of the major hindrances in the stability of crypto space. Cryptocurrency has already proved itself to be a filed filled with potential but these problems are a major set back.
Along with adoption and legalization, insurance was a problem as well. Crypto space and tradings occurring within the virtual environment are considered to be very risky. Because of this to prevent the investor from suffering a great loss the need for having insurance was felt.
This problem was solved when Lloyd’s of London announced in 2018 that they will be trying out the crypto space themselves. Lloyd’s of London is a renowned insurance marketplace.
This posed a very positive impact on crypto space’s reputation. Now in February of 2019 BitGo announced its partnership with Lloyd’s of London. BitGo announced that its clients will be getting insurance of up to a hundred million dollars ($100 million) on their funds.
Similarly, crypto exchanges are getting insurance for themselves too. Coinbase recently announced that it is getting insured for up to two hundred and fifty-five million dollars through Lloyd’s of London. Coinbase had made efforts for getting insurance back in 2013 too. Coinbase realizes its responsibility which is to provide its customers with an opportunity of getting their funds back if the funds get lost or are stolen
Philip Martin is the Chief Information Security Officer of Coinbase and he gave a statement regarding the situation saying that there are two types of insurance that can be provided in crypto space. One is the Crime marketplace and the other is the Specie marketplace.
Insurance in crime marketplace deals with losses that occur because of illegal activity and theft. Whereas, the insurance in specie marketplace deals with the losses that occur because private keys theft or physical damage. He concluded by saying that crypto exchanges should be given large crime based insurances.