Coinbase holds a $255 million insurance cover for hot wallets

The leading cryptocurrency exchange in the United exchange, Coinbase has revealed that it has started an insurance cover for its customers who store digital assets on the exchange platform. According to a blog post published on April 2, Coinbase bought the $255 million cover to protect the funds on its platform.

The post added that the covered has been offered by Lloyd’s of London-registered broker Aon. There has been a rise in cyber attacks targeting hot wallets on crypto exchanges in the industry. The chief information security officer at Coinbase Philip Martin detailed that the firm has had the cover since November 2013.

“We currently hold a hot wallet policy with a $255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates.”

Martin said in continuation:

“The rationale has remained the same the entire time: if the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole. The data is clear that, today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking.”