Nexus Mutual’s Insurance Now Covers Binance, Coinbase, Gemini & Kraken Users Against Security Breaches
Decentralized finance insurance protocol Nexus Mutual has updated the list of cryptocurrency exchanges that are eligible for incidence protection. The company's services will now include customers of centralized exchanges like Coinbase, Binance, Gemini, and Kraken.
More Custodians Welcome
The update, which was announced on Monday, will allow these exchanges’ customers to purchase protection against certain hacks or asset withdrawal issues.
It's part of the Custody Cover initiative, and it provides compensation for users who lose over ten percent of their funds in the event of a security breach on any of the supported exchanges. Users can also claim cover if an exchange suspends withdrawals for over 90 days.
Nexus Mutual launched Custody Cover in December 2020 to provide insurance cover for centralized crypto. At the time, the company explained that it was branching out of DeFi to build its insurance marketplace. The company's long term goal is to use blockchain to provide cover for companies and individuals within and outside the crypto space.
“We’re focused on the longevity of Nexus Mutual and want to become a marketplace that covers diverse risks both in and outside of the crypto space. We want to use the benefits of blockchain to protect all underserved communities and this is our first step in that direction.”
Custody Cover launched with support for six custodians – Celsius, BlockFi, Hodlnaut, Nexo, inLock, and Ledn.
With Custody Cover, Nexus Mutual is looking to solve the issue of overly high insurance coverage prices in the crypto space. While premiums for insurance vary based on the platform, numbers appear to be too high for everyday customers and traders.
A Spotlight on Custody
Nexus Mutual’s branching out into the centralized space is coming amid significant growth in the crypto custody space. In response to increased institutional crypto demand, custody providers have also done their bit to improve security.
Recently, Bank of America-Merrill Lynch conducted a survey showing increased Bitcoin activity from Wall Street players. The survey interviewed fund managers with $534 billion in assets under management. They found that institutions were increasingly trading in Bitcoin. Only the dollar and tech stocks saw more trades.
A report from Fidelity Investments also revealed that a third of institutional investors now own crypto assets. This increased enthusiasm from investors means asset custodians need to ramp up their security infrastructure to protect against hacks and other mishaps. In a report, auditing giant KPMG explained that custodians' top action will be to enable next-generation compliance and security measures.
The company recommends incorporating leading cryptographic techniques like sharding, multi-signature wallets, and multi-party computation. Essentially, cryptocurrency security will require input from both hardware and software solutions.