Today, the Winklevoss twins launched their own insurer to enhance coverage for Bitcoin and other crypto-assets.
Winklevoss Twins Cover Their Assets According to most experts, lack of insurance and proper custody services are hampering the mass adoption of crypto assets. So, to address this issue, the Winklevoss twins launched a captive insurance company, Nakamoto, Ltd. (Nakamoto). The purpose of Nakamoto is to insure crypto assets covered by Gemini Custody. At the launch, Cameron Winklevoss stated, 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. Cameron and Tyler Winklevoss’s purpose is to provide $200 million in insurance coverage through Gemini Custody. According to the announcement, this coverage represents “the largest limit of insurance coverage purchased by any crypto custodian in the world.” Nakamoto, Ltd. (Nakamoto) is a captive insurance company, which operates under a license from the Bermuda Monetary Authority (BMA). On the other hand, Gemini operates under the regulations of the New York State Department of Financial Services (NYDFS). According to the International Risk Management Institute, a captive insurer is an insurance company that is wholly-owned and controlled by its insureds. Its primary purpose is to insure the risks of its owners. Its insureds benefit from the captive insurer’s underwriting profits. The effort to launch Nakamoto involved the work of two global leaders in insurance and broking, Aon plc, and Marsh. New York Times: Lack of Custody Services Are holding Back Crypto Investments Another issue mentioned as hampering investments in the crypto market is lack of custody. According to The New York Times, The lack of back-office services like custody offered by major financial firms has been one reason that large investors across the world have held back from involvement in the highly volatile but potentially lucrative emerging asset. To respond to this challenge, Fidelity announced that it is enhancing its custody services in Europe. Specifically, as the NYT reported, on January 15, 2020, Fidelity Digital Assets announced it will be the custodian for bitcoin held by the London-based cryptocurrency investment firm Nickel Digital Asset Management. Do you think that providing proper insurance and custody services will facilitate Bitcoin’s mass adoption? Let us know your comments below.
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