Coinbase has revealed insurance coverage for its hot wallet crypto holdings. An official blog post from the Coinbase’s Chief Information Security Officer (CISO) Philip Martin has disclosed that there is insurance coverage up to $255 million for crypto holdings of the customers.
“We currently hold a hot wallet policy with a $255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates,” said Martin.
The exchange has had hot wallet insurance coverage since November 2013. Martin said the insurance for crypto holdings falls into the crime insurance category.
“Exchanges and wallets should have sufficient Crime coverage to fully cover their hot wallets (including enough buffer to handle asset price spikes). Custodians should have enough crime insurance to cover normal outbound customer transaction sizes or enough to cover whatever assets are programmatically accessible if they’re not using cold storage,” viewed Martin.
Coinbase, the San Francisco- based crypto exchange, holds less than 2% of its customer’s assets in hot wallets. Rest of the crypto is stored in cold storage safe from the hands of hackers. Hot wallets are prone to attacks as cryptocurrencies are stored online. Several exchange hacks have happened which involved stealing large amounts of cryptocurrencies being stolen by the hackers.
The demand for cryptocurrency insurance has increased over time, writes Martin. “We need a world where the ultimate owners of cryptocurrency are able to directly insure their assets stored with trustworthy, well-reviewed, transparent service providers,” concluded Martin.
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