Exchange of digital currencies Crypto.com’s insurance policy has been expanded to cover up to $750 million in digital assets, providing an extra layer of security for the platform’s 10 million users.
Arch Underwriting, a division of Lloyd’s Syndicate 12, is backing the new policy, which has been in effect since September 6. The policy covers Crypto.com’s cold storage assets held on Ledger Vault and includes both direct and indirect custodian coverage.
The policy is one of the largest in the cryptocurrency industry, surpassing the $700 million in coverage purchased earlier this year by digital custodian BitGo. Insurance coverage for digital assets is being expanded to protect against physical damage and, perhaps more importantly, third-party theft.
As mainstream investors and institutional funds increasingly turn to cryptocurrencies, consumer protection standards are becoming increasingly important. The total cryptocurrency market is now worth more than $2.2 trillion, after reaching a high of more than $2.5 trillion earlier this year. The total value of crypto assets was around $350 billion a year ago.
Hedge funds, wealth managers, and corporations have all become important players in the market’s growth. Now that crypto investing has been sufficiently de-risked in terms of career reputation, financial advisers are also looking to get in on the action. Retail investors remain active in the space, as evidenced by the success of mobile investing apps like Crypto.com.
Despite the presence of large, institutional players, crypto infrastructure remains vulnerable to coordinated attacks, particularly in decentralized finance, as the $600-million Poly Network exploit in August demonstrated. As more service providers emphasize security and data privacy standards, insurance policies that provide monetary protection against theft are likely to become more important.