Bittrex Obtains $300 Million Of Insurance For Its Cold Storage Assets

January 30, 2020 / by Crypto.IQ

Bittrex, a popular cryptocurrency exchange based in the United States, announced that it has obtained $300 million of insurance for digital assets in its cold storage system. The insurance was obtained via Marsh, a leading insurance broker, and the coverage is placed with Arch Syndicate 2012 which is supported by various syndicates at Lloyd’s of London. In simpler terms, Bittrex’s new insurance policy is high quality, and it covers external theft and internal collusion.

Cryptocurrency exchanges have been hacked over and over throughout the years. Even Binance, which has some of the best security, was hacked last year. Therefore, it makes complete sense for Bittrex and any other crypto exchange to obtain insurance, since even with the best security a hack could still happen.

In fact, it is a bit surprising that Bittrex was able to obtain this $300 million policy considering the atrocious track record of exchange hacks in the crypto space. Apparently Bittrex’s security and stability is widely recognized, and many other exchanges use Bittrex’s security technology, which impressed the underwriters.

Bittrex did not disclose how much it is paying for this insurance, although presumably it is a high premium relative to other industries. Indeed, insurance companies balance the risk, coverage, and premium to make sure that they will almost certainly make money long term.

Ultimately, crypto exchanges having insurance is a highly positive sign for the crypto space. If Bittrex is hacked in the future customers will not have to worry about permanently losing their money, and this sense of security among crypto traders could increase adoption.

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