Institutional customers storing Bitcoin and other digital assets in GK8’s cold vault will receive up to $1 billion in insurance coverage.
Digital asset custody platform GK8 has partnered with USI Insurance Services to expand its insurance policy for institutional customers — a move the company said would incentivize banks and other financial institutions to start investing in cryptocurrency.
The insurance policy offers up to $1 billion of coverage per client for digital assets stored with GK8’s offline “cold vault” and up to $125 million for assets stored via its multiparty-computation-based institutional wallet. GK8 said the insurance caps, announced on Nov. 28, are significantly higher than any other digital asset policies on the market today.
Lior Lamesh, GK8’s co-founder and CEO, said the new insurance coverage would “incentivize new institutional players to confidently step into the crypto space” and let existing customers increase their holdings of digital assets.
Lamesh told Cointelegraph that GK8’s clients “need access to a higher cap of insurance in order to increase the peace of mind and protect all the [assets under management] of their clients fully.”
USI Insurance Services, GK8’s underwriting partner, is an insurance brokerage headquartered in Valhalla, New York. The company generated nearly $2 billion in revenue in 2021.
Institutional investors have shown a keen interest in adopting digital assets, but concerns around regulation and security have limited uptake so far. The collapse of crypto exchange FTX may have exacerbated these concerns, with Binance CEO Changpeng Zhao opining that investor sentiment could take years to recover. Meanwhile, former United States presidential candidate Andrew Yang told the Texas Blockchain Summit on Nov. 18 that FTX’s collapse could create an appetite for harsher regulation.
Related: Crypto insurance a ‘sleeping giant’ with only 1% of investments covered
Calls to curtail crypto adoption have grown louder in Washington, with Senators Elizabeth Warren, Tina Smith and Richard Durbin urging Fidelity Investments to reconsider offering retirement planners access to a Bitcoin (BTC) investment product.