Two bitcoin-based companies in Canada, Bitbuy and Knox, are working together to offer clients full insurance on all their deposits.
Knox and Bitbuy Join Hands Over Insurance
Lagging insurance protocols have brought the cryptocurrency space down for years. This could arguably be why so many institutional players and others have been reluctant to get involved in digital currency trading. While these assets are prone to volatility, the space has also been very vulnerable to theft and cyberattacks. Many times, large examples of theft make their way into the space, thereby resulting in millions of digital dollars lost forever.
The bad thing about this isn’t just the fact that the money was taken. It’s that many exchanges, being decentralized and unrecognized by financially governing authorities, cannot and do not offer any form of insurance on the deposits made. Thus, whatever money is gone is usually gone for good.
Bitbuy and Knox are looking to change that. Both companies met in 2018 at a Toronto conference. Adam Goldman – founder and president of Bitbuy – explained in an interview:
Our two companies are strongly aligned on the direction of the industry, including consumer protection and regulatory advancements. Our partnership is the result of a collective commitment towards establishing a transparent framework for safekeeping client assets.
Knox is working with its respective insurance broker Marsh to provide both theft and technical insurance for any customer that happens to lose funds due to outside parties or forces. CEO Alex Daskalov is hoping that this maneuver will help to propel bitcoin and the cryptocurrency space deeper into mainstream territory, and he believes other companies will strive to follow in both Knox and Bitbuy’s footsteps.
He states:
It is difficult for a customer to engage technical due diligence on an exchange, and we have always believed that systems should be vetted by competent third parties so that customers have a ready source of safety signals. For that, we believe that Bitbuy succeeding in becoming the first exchange to hold bitcoin in a comprehensively insured setting is a major step up for both the Canadian and global exchange space.
Bitbuy and Knox are continuing a trend in the crypto space that is still relatively new. Very few crypto-delving companies offer insurance relating to digital assets, though there are some out there. Some of the names that come to mind include Chubb, XL Catlin, and Mitsui Sumitomo. They offer these services to customers seeking to store digital currency on associated changes.
Paving the Way for a Safer Future
Still, crypto coverage via insurance is not “the norm,” and Dean Skurka – head of finance and compliance at Bitbuy – is hoping this will change over time. He says:
Industry standards and consensus best practices are integral while regulators evaluate their jurisdictional claim over our industry. Two Canadian companies coming together to help establish these standards represents a big step forward.