Ledger, the developer of security and infrastructure solutions for crypto-assets, announced on November 14 that it had acquired a crime insurance policy that covers digital assets.
According to a press release shared with Crowdfund Insider, users’ assets will be secured by the Ledger Vault platform.
As noted in the announcement:
“This program follows a rigorous evaluation of Ledger Vault’s hardware and software security infrastructure as well as governance policies. Ledger Vault worked for the last year with leading broker and risk advisor Marsh and a lead underwriter of crypto-asset insurance, Arch Insurance (UK) Limited (Arch), to develop the custom program at the behest of Vault clients.”
Marsh is a business of Marsh & McLennen (NYSE: MMC). Arch Capital Group Ltd. is a Bermuda-based company with approximately $12.49 billion in capital as of June 30, 2019.
As mentioned in the release, the Ledger Vault platform comes with a customizable crime insurance program that insures users’ digital assets for up to $150 million. The coverage is for all “third-party theft” of users’ master SEED phrase and private keys in the event of a physical security breach of a hardware security module (HSM) at a “secure” data center.
The coverage also applies to “secure transmissions of the master seed fragments as part of the client onboarding,” the release noted. The insurance also covers potential cases where there’s insider Ledger employee theft “caused by collusion.”
The Ledger Vault insurance policy will cover all digital assets and tokens that are presently supported by the Vault platform. There’s also a way to add new coins or digital tokens to the insurance policy coverage as needed.
Unlike digital asset custodians, exchanges, or traditional banks, the developers of the Ledger Vault platform are not required (by law) to obtain insurance as the company is strictly a security technology platform.
However, Ledger’s management says it understands that it might be challenging for Vault customers to get insurance coverage of this “magnitude.” That’s why the company decided to proactively obtain insurance for its Vault platform at no extra cost to users.
Vault clients don’t have to worry about independently passing the insurance security evaluation process. They will also be able to save time and money and be able to focus more on their actual business.
As explained in the release, Vault clients can directly purchase primary coverage as required, in addition to the existing Ledger Vault policy. Ledger Vault has now become the first crypto asset security platform to provide convenient access to a customizable crime insurance policy.
Pascal Gauthier, CEO at Ledger, stated:
“We consider insurance a crucial part of a comprehensive plan as digital assets gain a foothold in institutional portfolios. As a new class of assets, securing digital currencies has become a complex challenge for both institutions and insurers. Through our efforts with Marsh and Arch to curate this comprehensive crime insurance policy, we are playing a pivotal role in the movement to secure and insure all critical digital assets.”
Demetrios Skalkotos, global head at Ledger Vault, remarked:
“The combination of Ledger Vault’s secure hardware and software operating systems, along with our governance protocols, allowed Marsh and Arch to expand standard cold storage coverage to the Ledger Vault solution. The policy also covers the clients’ onboarding process, their personal security devices and the secure encrypted communication channel that is established when using the Vault platform. This unique policy is a true end-to-end solution that gives our customers the flexibility to both store and move funds without compromising on security and governance.”
Jennifer Hustwitt, senior VP with Marsh’s global Digital Asset Risk Transfer Team, noted:
“As this asset class matures, we are focused on structuring insurance programs that align with how the underlying technology functions. This Ledger insurance program marks the next chapter in the burgeoning insurance market for digital asset risks.”
James Croome, VP of Specie at Arch, said:
“We spent over 6 months working with the Ledger Vault team to develop a customized offering for their clients. Ledger took the time to educate us on every detail of the end-to-end security and governance that the Vault platform provides. This $150 million policy underscores just how impressed we are with the security technology platform they’ve built.”
Ledger has sold over 1.5 million Nano devices. The company recently celebrated its five-year anniversary. Vault, Ledger’s primary institutional offering, reportedly has over 40 clients located throughout the world.
Ledger Vault’s client base includes family offices, digital currency exchanges, trust and payment firms, and digital asset custodians. Its clients include Bitstamp, Uphold and Crypto.com.