Lloyd’s of London to provide cryptocurrency insurance for Kingdom Trust custody platform
While traditional banking firms are shying away from digital assets, Lloyd's of London is setting an example by agreeing to provide insurance coverage for Kingdom Trust, a cryptocurrency storage firm. Lloyd's of London will now provide insurance for Kingdom Trust's $12 billion worth of assets including traditional and alternative assets. This agreement might help induce larger financial institutions to invest in the rapidly growing cryptocurrency business.
Kingdom Trust is a regulated trust company of South Dakota which has been serving as a qualified custodian and specializing in different asset classes. According to its CEO Matt Jennings, the company has been on the lookout for insurance coverage since 2014 but it increased its efforts towards the endeavor last year.
"Qualified custody by a regulated, insured financial institution is a top priority and critical hurdle for institutions to invest in the digital asset markets. By adding another trusted specialist like Lloyd’s to our platform, we’re ensuring that current and future clients will have access to a highly-secure, complete safekeeping solution tailored to meet the challenges of institutional finance,” said Jennings, according to a press release.
Kingdom Trust offers custodial services for over 30 cryptocurrencies like Bitcoin, Ethereum, Litecoin, and ZCash. The company says it can legally hold custody of assets on behalf of investment advisers, securities brokers, and retirement plans in accordance with the US financial regulations. In a whitepaper published by the company, Jennings talks about why the cryptocurrency industry needs a qualified custodian. "Most digital currency investors take self-custody
of their digital assets or rely on an unregulated custodian to custody their assets. Many are not even aware of this or do not understand the difference in self-custody, using an unregulated custodian, as opposed to using a regulated qualified custodian," said Jennings.
Some insurance businesses are cryptic about their cryptocurrency holdings and investments. This is because of numerous incidents related to hacker attacks and crypto jacking. Therefore most businesses tend to give coverage to coins in cold storage (offline) and not coins in hot storage (online). However, increased adoption of cryptocurrencies across various domains can help create a decentralized economy, the essence of blockchain technology.
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