Gemini ventures into insurance business - launches ‘Nakamoto’ to provide $200M crypto coverage
January 16, 2020, 7:55AM EST · 1 min read
- Gemini has launched a “captive” insurance company, dubbed “Nakamoto”
- The new company will provide $200 million worth of coverage for offline assets or “cold” wallets
- The initiative has been launched in collaboration with leading insurance brokers Aon and Marsh
Cryptocurrency exchange and custodian Gemini has launched a “captive” insurance company, dubbed “Nakamoto.”
Captive insurance is an alternative to self-insurance in which a company creates a licensed insurance company to provide coverage for itself. Gemini’s Nakamoto is licensed by the Bermuda Monetary Authority, according to an announcement published Thursday.
Nakamoto will provide $200 million worth of coverage to Gemini customers for assets held in offline or “cold” wallets. Gemini said it is the “largest” limit of insurance cover currently available by any crypto custodian in the world.
Coinbase offers $255 million in insurance coverage, but that is for assets held in online or “hot” wallets.
Gemini has launched Nakamoto in collaboration with leading insurance brokers Aon and Marsh. Aon helped Gemini incorporate the captive insurance company in Bermuda, the world’s largest jurisdiction in terms of the number of licensed captive insurers.
“Aon as Nakamoto's captive manager, Gemini will be able to tap into broader insurance markets, including the reinsurance markets, to obtain access to greater amounts of insurance capacity at optimal costs,” said Gemini.
Marsh, on the other hand, brokered excess insurance via its Digital Asset Risk Transfer team. Excess insurance is a cover against losses over and above that provided by Nakamoto.
Cameron Winklevoss, president of Gemini, said insurance is “one of the main barriers to crypto mass adoption” and via Nakamoto the firm plans to address the issue. “Obtaining meaningful insurance in the crypto industry remains a challenge, and our captive will help to increase our insurance capacity and move the industry forward."
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