Leading hardware wallet vendor Ledger has secured insurance cover
for its institutional crypto asset custody service to the tune of $150 million.
The crime insurance policy was secured with the help of top
insurance broker Marsh and is underwritten by Lloyd’s of London Syndicate
member Arch Insurance.
The news comes on the back of the launch of Bakkt’s custody service earlier this week. Bakkt was thought to be alone in securing substantial insurance coverage of $125 million for its Bakkt Warehouse offering.
Bakkt has not revealed the name of the entity that has underwritten its insurance policy.
Ledger’s institutional service, Ledger Vault, provides businesses
with a multi signature system that includes individual hardware wallets for
interacting with the Vault as part of a Hardware Security Module that segregates
signing, governance and currency scripts for transactions, from the chain and
managed services and the user interface integration.
Crowded cryptoasset custody sector
Custody services is a crowded space with long-time market leaders such as Zapo joined in more recent times by a variety of other players of all sizes, such as Coinbase Custody, BitGo and Fidelity Digital Assets.
Storing crypto safely is still an issue for private
individuals and even more so for institutions, so this latest development should
be seen as an important step forward for the onboarding of institutions into
the crypto space.
The Ledger Vault insurance also provides the option for
individual companies to take out their own insurance in addition to Ledger’s
Marsh has been working with Ledger for the past year to put
the insurance policy in place.
Arch vice president of specie James Crome says the
underwriter spent six months developing the customised offering for Ledger’s
clients. “This $150 million policy underscores just how impressed we are with
the security technology platform they’ve built,” says Crome.
Key for onboarding institutions into crypto space
Demetrios Skalkotos, global head of Ledger Vault, said in a
press statement: “The combination of Ledger Vault’s secure hardware and
software operating systems, along with our governance protocols, allowed Marsh
and Arch to expand standard cold storage coverage to the Ledger Vault solution.
“The policy also covers the clients’ onboarding process, their personal security devices and the secure encrypted communication channel that is established when using the Vault platform.
“This unique policy is a true end-to-end solution that gives our customers the flexibility to both store and move funds without compromising on security and governance.”
French company Ledger is the start-up behind the popular Ledger Nano hardware wallet, which, along with Trezor, dominates the private investor market for hardware cryptoasset storage solutions.
The Ledger Vault policy insures, among other things, against
third-party theft of the master seed and insider theft, and all the crypto
assets currently stored with Ledger Vault are covered by the policy, with a
mechanism to add more coins and tokens “as may be necessary”.
UK firm Arch Insurance is a subsidiary of Arch Capital based
in Bermuda and is regulated by the UK’s Financial Conduct Authority and Prudential
Marsh is one of the largest global insurance brokers and its
insurance and risk management business employs 35,000 people in 130 countries,
with annual revenue of $17 billion.
Ledger chief executive Pascal Gauthier commenting on the news said: “We consider insurance a crucial part of a comprehensive plan as digital assets gain a foothold in institutional portfolios. As a new class of assets, securing digital currencies has become a complex challenge for both institutions and insurers. Through our efforts with Marsh and Arch to curate this comprehensive crime insurance policy, we are playing a pivotal role in the movement to secure and insure all critical digital assets.”