Gemini, a bitcoin/cryptocurrency exchange and custodian, today launched Nakamoto, Ltd. (Nakamoto), a captive insurance company licensed by the Bermuda Monetary Authority (BMA) to insure Gemini Custody.
Nakamoto allows Gemini Custody to increase its insurance capacity beyond the coverage currently available in the market. The new insurance solution gives Gemini Custody $200 million in insurance coverage — the largest limit of insurance coverage purchased by any crypto custodian in the world.
“Insurance is one of the main barriers to crypto mass adoption. Gemini has created a captive insurance company to address this. 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.”
– Cameron Winklevoss, President of Gemini
Gemini Custody + Nakamoto
Gemini Custody is regulated by the New York State Department of Financial Services (NYDFS) and is SOC 2 Type 1 compliant. Separate from Gemini Custody, Gemini also offers insurance for customers’ crypto-assets in its online “hot wallet,” USD deposits are eligible for FDIC “pass-through” deposit insurance.
“Currently, the crypto industry lacks insurance coverage similar to that available in traditional financial markets. Gemini recognized this gap and collaborated with two of the world’s largest insurance brokers, Aon and Marsh, to solve for this.”
– Yusuf Hussain, Head of Risk of Gemini
Gemini worked with Aon to incorporate Nakamoto in Bermuda, a leading captive insurance jurisdiction. With 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 insurance capacity at optimal costs. Gemini can then pass savings to customers and scale their insurance needs into the future.
Additionally, Marsh’s Digital Asset Risk Transfer (DART) team brokered excess insurance from the commercial insurance markets to provide a custody insurance solution. Gemini was able to demonstrate a secure, compliant, and regulated custody offering, providing insurers the confidence to underwrite a substantive amount of insurance for Gemini Custody.
In addition to the coverage provided by its custody insurance solution, Gemini customers can now purchase additional insurance for their segregated crypto-assets to provide even greater coverage.