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BitGo, a crypto custodian backed by Goldman Sachs, offers insurance coverage of up to $ 100 million for cold portfolio badets through Lloyd's. There is no additional cost for BitGo customers.
In a press release, the company said the $ 100 million insurance coverage was protecting the deposit badets held by BitGo against:
- Piracy of third parties.
- Insider stealing by employees of private keys.
- Physical loss or damage to private keys.
Mike Belshe, the CEO of BitGo, introduced the new service:
"This is the most comprehensive insurance offering in the industry. It is not always easy for some clients to understand under what circumstances their investments are insured and to what extent their loss would be covered.
We change this by being more transparent than any other company on the terms of our coverage. Transparency and accuracy are essential to building trust in the marketplace. "
Goldman and Novogratz have invested $ 15 million in BitGo
BitGo, based in Palo Alto, Calif., Is financially supported by Goldman Sachs and Galaxy Digital, a cryptomodern bank founded by former Goldman partner Mike Novogratz.
In September 2018, BitGo received regulatory approval from South Dakota's banking division to provide custody services, making it the only regulated custodian developed exclusively for cryptocurrency badets.
BitGo joins a growing number of companies offering crypto-depository services, including Citigroup, Coinbase and Gemini, all of which are aimed at institutional investors.
Quadriga Disaster highlights the need for insurance
Quadriga CX, the largest cryptocurrency exchange in Canada, could benefit from cold portfolio insurance.
As reported by CCN, Quadriga lost access to more than $ 190 million of funds stored in both crypto and fiat after the unexpected death of its founder, Gerald Cotten, in December 2018. The young man aged 30 years died in India as a result of Crohn's disease.
Cotten had exclusive control over the funds held in the cold room portfolios of Quadriga. These are portfolios that are stored offline and are not connected to the Internet.
Key encryption transactions typically store a large portion of their funds in a cold store to protect against hackers and other security breaches. Many have put in place a multiple signature system that allows investors to withdraw funds in the event of abnormal events, such as the untimely death of the sole custodian.
Quadriga did not have a continuity system in place. And now no one can access the funds since the death of its founder.
Quadriga: we can not find our portfolios
In early February, Quadriga admitted that it had not been able to recover cash and the cryptocurrency badets it was storing, as reported by CCN.
"We've done a lot of work to solve our liquidity problems, which include trying to locate and secure our very large cryptocurrency reserves in cold wallets, and needed to satisfy customers' cryptocurrency deposit balances. as well as looking for a financial institution to accept payments. the bank drafts that must be transferred to us.
Unfortunately, these efforts have not been successful. We have sought creditor protection to help resolve these issues and protect the interests of our clients. "
Two weeks ago, a judge granted Quadriga a 30-day stay on creditors' claims and possible lawsuits, while the beleaguered exchange tried to gain access to Gerald Cotten's mobile phone and lost crypto of $ 190 million. of dollars.
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