UPDATE (April 1, 09:20 UTC): The article has been updated to reflect corrected information sent to CoinDesk from Coincover after publication. Specifically, the changes include that the product is a deposit guarantee, not loss insurance.
A new cryptocurrency wallet deposit guarantee product from Coincover offers better protection than many existing custodial solutions, the firm says.
The Cardiff, U.K.-based risk management provider, underwritten by Lloyd’s of London, announced Tuesday that its new deposit guarantee product would provide Civic wallet users with up to $1 million in cover. It is assigned automatically when a user registers for a Civic wallet and requires no further steps to qualify.
The firm said this is the first hot-wallet deposit guarantee offering to date that offers $1 million in protection.
Coincover told CoinDesk the policy provides the same sort of guarantee found with credit cards and bank accounts. It also offers a different type than many existing custodial solutions, such as BitGo or Gemini, according to Sharon Henley, Coincover’s head of marketing.
The deposit guarantee is different from the theft cover Coincover first announced in early March. One of the key differences with their deposit guarantee, according to Henley, is that each user is covered individually at up to a million dollars.
That means Coincover’s guarantee can actually, sometimes, cover for more than some of the large insurance policies taken out by custodial solutions. Henley told CoinDesk the product “can be standalone or supplemental to the insurance that BitGo [a custodial solution] provides their customers at the cold storage level.”
“Having funds insured offline as well as the option to purchase insurance for online holdings when trading and transacting is what we feel is the most comprehensive and safest way for businesses and customers to have holistic protection of their funds,” she said.
“This is the first [example] where essentially an entire platform is guaranteeing the funds of their customers,” Henley said. More than 150,000 customers have already signed up for the Civic wallet, which is currently in private beta.
“We believe that everyone needs access to a neutral, trustworthy place to store their digital currency, especially in this extraordinary new financial climate,” said Vinny Lingham, Civic’s CEO and co-founder. “People are looking to move their digital currency so that they have more control and reliable, easy restoration if they ever lose access to their funds.”
The Coincover team spent three years when they were working for the British Royal Mint’s gold-on-the-blockchain initiative – which was put on ice in late 2018. After they left to form Coincover in mid-2018, it took an additional 18 months of “convincing the insurers what essentially the true risk profiles were,” Henley added.
The policy was finally confirmed in early February 2020.