Crypto.com announces a $360 million insurance fund for their offline crypto assets after partnering with institutional custody provider Ledger Vault, who offered additional insurance through Lloyd’s of London subsidiary crypto arm, Marsh.
We have secured a $100M policy led by Arch Underwriting at Lloyd's Syndicate 2012, extending our insurance coverage to $360M! 💰🔒As we reach our 2M user milestone, the security protection of our platform and customers remain as our top priority. Details – https://t.co/1lCRsBJnjK pic.twitter.com/Ux8zs96fw6
— Crypto.com (@cryptocom) May 11, 2020
However, the company’s CEO, Kris Marszalek, stated the journey to securing the additional funding is costing “an arm and a leg” but hopes for more competitors to enter the field to give crypto companies wiggle room in negotiation.
Crypto.com Insurance Fund Grows to $360 Million
Ledger Vault, a crypto-insurance fund secured a partnership with Lloyd’s of London Syndicate Arch back in 2019, securing a $150 million crypto insurance policy. Crypto.com, a subscriber to the system topped up $100 million through a direct plan and an additional $110 million in custody insurance from BitGo.
Marsh and Arch, the crypto arm in Lloyd’s who are leading focus on crypto-insurance enabled the Crypto.com’s additional insurance policy. James Croome, head of specie for Arch Underwriting believes current challenges in the underwriting of crypto insurance policies lie in understanding the custodial processes employed by the firms. Croome further said:
“By choosing to partner with Ledger Vault, a known service provider to insurers, Crypto.com was not only able to provide underwriters with the necessary confidence in their custodial security, but they were also able to obtain a policy in a much shorter time frame than is ordinarily the case.”
Crypto Insurance is a Hard nut to Crack
Despite successfully raising a record amount of $360 million in Crypto.com’s offline assets insurance, the CEO, Kris Marszalek, laments on the difficulty and time-consuming process, the big institutional insurance firms take. Kris said:
“These types of big firms and institutions take their sweet time of course, and boy, oh boy, do they charge an arm and a leg for this.”
The company paid for the firm’s education in its custodial services within the space. Kris hopes the field will get more competitors in offering insurance to give a leeway for crypto companies to negotiate better rates. He concluded:
“Over time, as the industry gets bigger and maybe some competitors come in, we will have slightly more leverage to negotiate.”
However, top exchanges across the field are coming up with their insurance fund in a bid to solve the current barriers of entry in the institutional crypto-insurance field. Binance, BitMEX, Huobi and other top exchanges are all taking up the “self-insure” approach, but Kris quite prefers an external player given the audits and trust by the users. He said:
“Am I a fan of the insurance industry in general? Probably not. But our customers care. They know that before the insurer gives their stamp of approval, they are going to go in and check everything.”
Crypto.com Adds Payment Plug-in on Ecwid
Currently, the crypto exchange platform has over 2 million customers on the platform, and the number looks set to grow further after recently launching crypto debit and credit card purchases in several countries. Kris explained that the latest crypto insurances were less to do with the fund growing to support the several clients they have.
Furthermore, the company recently announced a partnership with Ecwid, a Shopify kind like application, to provide crypto payment checkouts on the platform. With the platform boasting over one million customers, the Crypto.com Pay Checkout plugin is expected to further raise awareness on crypto utility.
The plugin will support top crypto payments including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP and Crypto.com Coin (CRO), the platform’s native token.