Coinbase Reveals Hot Wallet Coverage Up to $225 Mln Via Lloyd’s of London Broker
Coinbase has revealed details of its insurance coverage for its hot wallet crypto holdings, reportedly covering a $255 million limit via a Lloyd’s of London-registered broker.
Major American cryptocurrency exchange Coinbase has revealed details of its insurance coverage for its hot wallet crypto holdings, reportedly covering a $255 million limit via a Lloyd’s of London-registered broker. The details were disclosed in an official blog post from Coinbase’s Chief Information Security Officer (CISO) Philip Martin on April 2.
According to Martin, Coinbase has held an insurance policy covering its hot wallet crypto holdings since mid-November 2013, in particular to protect against what the exchange identifies as being the highest-risk consumer loss scenario in the crypto space — theft by hacking. Martin’s post outlines that Coinbase currently holds:
“[A] hot wallet policy with a $255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates."
Lloyd’s of London, as Martin notes, is itself not an insurance company but rather functions as its own partially-mutualized insurance marketplace, within which multiple underwriters, grouped in syndicates, come together to pool and spread risk.
The two chief insurance classes involved in crypto insurance, Martin outlines, are the Crime and Specie marketplaces. The former focuses on losses potentially caused by hacking, insider theft, fraudulent crypto and fiat transfers, and so forth. The latter — Specie — focuses on physical damage or the loss of priv