Busitech: Ledger’s Vault Scores $150 Million in Crypto Insurance From Lloyd’s Syndicate

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Ledger’s Vault Scores $150 Million in Crypto Insurance From Lloyd’s Syndicate

Busitech: Ledger’s Vault Scores $150 Million in Crypto Insurance From Lloyd’s Syndicate

Marsh has arranged a $150 million insurance policy from Lloyd’s of London syndicate Arch for users of the startup’s Ledger Vault technology platform, the companies announced Thursday.

Ledger, the creator of the iconic Nano hardware wallet, is wooing institutional investors to use its technology to custody cryptocurrency for themselves with the help of big-name insurance broker Marsh.

Marsh has arranged a $150 million insurance policy from Lloyd’s of London syndicate Arch for users of the startup’s Ledger Vault technology platform, the companies announced Thursday.

The move is another sign that the insurance industry is gradually becoming comfortable writing coverage for digital assets – widely considered a prerequisite for institutional investment.

In the past year, quite a few crypto custodians have trumpeted insurance cover in the hundreds of millions. Unlike those firms, Ledger Vault is not a custodian; rather, it provides tools for investors to store their own crypto.

“We didn’t have to do this. We are buying insurance for the Vault platform at no additional cost to customers of our platform,” said Demetrios Skalkotos, global head of Ledger Vault.

Demetrios Skalkotos, Global Head of Ledger Vault, said: “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.”

Jennifer Hustwitt, Senior Vice President with Marsh’s global Digital Asset Risk Transfer Team, said: “As this asset class matures, we are focused on structuring insurance programs that align with how the underlying technology functions. This Ledger insurance program marks the next chapter in the burgeoning insurance market for digital asset risks.”

James Croome, Vice President of Specie at Arch, said: “We spent over 6 months working with the Ledger Vault team to develop a customized offering for their clients. Ledger took the time to educate us on every detail of the end-to-end security and governance that the Vault platform provides. This $150 million policy underscores just how impressed we are with the security technology platform they’ve built.”

Ledger has sold more than 1.5 million Nano devices globally and recently celebrated its five year anniversary. Vault, Ledger’s institutional offering with enhanced software security protocols, has more than 40 clients located across the APAC, EMEA and the Americas regions. Ledger Vault has a broad customer base that includes family offices, exchanges, trust and payment companies, and custodians, and clients such as Bitstamp, Uphold and Crypto.com.

Ledger’s policy covers third-party theft of private keys in the event of a physical breach of a hardware security module (HSM) in one of its data centers. Also covered is the entirety of the on-boarding process for clients which involves the generation of private keys within the company’s HSMs, as well as collusion within Ledger leading to insider employee theft.

The policy does not, however, cover theft via a third-party remote hack of the type reported fairly regularly at crypto exchanges around the world. The Ledger Vault solution itself is meant to prevent this type of hack by isolating private keys from the internet.

Firms using Ledger Vault set up their own transaction controls and governance procedures. The firm is trying to move away from the frame of reference of online “hot” wallets and offline “cold” ones, calling itself “temperature-agnostic.”

On top of the new insurance policy, Ledger Vault clients will be well-placed to arrange their own dedicated primary insurance facilitated and “fast-tracked” by Marsh and Arch, the companies said.

“Clients that are part of this insurance program for Ledger Vault have the ability to obtain a dedicated limit that is dependent on the assets held on the Ledger Vault platform,” said Jennifer Hustwitt, senior vice president at Marsh & McLennan Companies, the insurance broker’s parent. “It would be separate from the $150 [million] that Ledger is purchasing.”

James Croome, vice president of specie at Arch, said in a statement that the syndicate “spent over six months working with the Ledger Vault team to develop a customized offering for their clients.”

Ledger has sold 1.5 million units of its flagship consumer product, the Nano, a device for storing private keys to crypto wallets.

Ledger’s Vault Scores $150 Million in Crypto Insurance From Lloyd’s Syndicate
Ledger’s Vault Scores $150 Million in Crypto Insurance From Lloyd’s Syndicate

Insurance offerings for crypto grow

As more money enters the cryptocurrency sector, investors are looking to digital asset insurance policies in order to cover losses due to possible thefts or accidents.

Indeed security research firm CipherTrace has previously estimated that more than $4 billion worth of cryptocurrency was lost through theft and fraud in 2019.

Cardiff-based cryptocurrency insurance startup Coincover launched a cryptocurrency insurance offering in September. Coincover reportedly monitors the wallet at all times and issues warnings if it observes suspicious activity.

About Ledger Vault
Ledger Vault is a core business unit of Ledger, a leader in security for cryptocurrencies and blockchain applications. Leveraging Ledger’s industry-leading and independently-certified security technology, the Ledger Vault provides information technology infrastructure for financial institutions to securely control their crypto assets with a multi-authorization self-custody management solution. With a global team of more than 200 professionals, Ledger develops a variety of products and services that safeguard crypto assets for individuals, companies and connected devices. Founded in 2014, the company has offices in Paris, New York, Hong Kong and Vierzon.

For more information about the Ledger Vault, please visit www.ledger.com/vault.

About Marsh
Marsh is the world’s leading insurance broker and risk adviser. With over 35,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data driven risk solutions and advisory services. Marsh is a business of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue approaching US$17 billion and 76,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Merceqr, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobal; LinkedIn; Facebook; and YouTube, or subscribe to BRINK.

About Arch Insurance (UK) Limited
Arch Insurance (UK) Limited, a wholly owned subsidiary of Arch Capital Group Ltd., provides specialized property and liability insurance programs to a wide range of industrial and commercial companies and financial institutions. Arch Insurance (UK) Limited is authorised and regulated by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.

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About Arch Capital Group Ltd.
Arch Capital Group Ltd., a Bermuda-based company with approximately $12.49 billion in capital at June 30, 2019, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries. Visit archcapgroup.com for more information.

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