GK8 by Galaxy The future of finance: Transforming finance in the digital age

Understanding Digital Asset Insurance: What You Need to Know

With insurance, institutions can protect their digital assets and ensure that they are financially compensated in case of a breach.

In recent years, institutions have begun embracing digital assets as an alternative investment class. However, this emerging asset class also presents unique challenges and risks, such as cyber security threats and theft. In fact, according to Comparitech, over $3.5 billion worth of crypto was stolen in 2022 alone, up 30% since 2021. Alongside the events of 2022 and the latest banking crisis, more organizations are looking to self-custody solutions as a means to protect their digital assets.

One important aspect of self-custody solutions is digital asset insurance. With insurance, institutions can protect their digital assets and ensure that they are financially compensated in case of a breach. Insurance offers another layer of protection and peace of mind for cryptocurrency investors in these volatile times. Moreover, there are indications that regulators will hold custodians liable for the loss of customers’ funds. Thus, insurance coverage is becoming increasingly important in the digital asset industry.

However, insurance for the new digital asset class is still a relatively nascent and emerging field. Traditional underwriters are only now learning the market, and coverage is not yet standardized. The lack of clarity about coverage offered by vendors can make it difficult for institutions to understand their options and effectively negotiate additional coverage when required.

When considering whether to insure digital assets, insurance providers evaluate the institution’s compliance with custodial standards, their use of various hot and cold storage technologies, as well as their policies and procedures. The quality of these measures impacts the company’s ability to obtain coverage and the price.

In the custody space, there are different coverages that institutions need to understand, such as specie insurance, cyber insurance, crime policy, and more. Each of these policies provides coverage for various risks and situations. For example, specie insurance covers theft or loss on-premises, while cyber insurance covers costs related to hackers who may gain access to company-stored personal information.

To make the right decision for your organization, clients should ask questions and ensure they have the right information. GK8 partners with some of the world’s most reputable insurance brokers to offer customers the ability to access the highest insurance coverage cap for digital assets. Through these collaborations, GK8 clients have access to dedicated coverage extending up to $1 billion per cold vault and up to $125 million per MPC, minimizing risk drastically. For more information, click here.

Digital asset insurance is becoming increasingly important in the digital asset industry. Insuring a self-custody solution is essential but can be complicated. Thus, it is imperative to work with an experienced provider to tailor a package that suits your institution’s specific needs. By choosing the right digital asset insurance coverage, clients can protect their digital assets and ensure they are financially compensated in the event of a breach.

To learn more download our white paper.

Continue reading

The Tortoise and the Hare: How Banks Can Stay Ahead In the Crypto Race

Though institutions invest heavily in fortifying their operations from advanced breach attempts, they often lack an in-depth understanding of digital assets’ specifics, which is crucial for guaranteeing security for their clients.

Can we start calling blockchain mainstream yet? Not so fast

Blockchain’s first step toward becoming mainstream needs to start with the ability to safely own an asset, making digital wallets inviolable with institutional-level custody of assets.

GK8 is first to provide institutions access to $1B insurance coverage

The partnership with USI empowers GK8 clients to access the insurance policy, with dedicated coverage extending up to $1 billion per client. This unique offering denotes the highest limit of insurance available on the market today.