Kingdom Trust has recently announced that it has secured insurance for its digital currency custody platform through Lloyd’s of London. As per an official press release, the insurance will reportedly cover all digital currencies that are stored on its platform.
Discussing this move, Kingdom Trust CEO Matt Jennings said:
“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.”
Could Insurance Make Third Party Custody Platforms More Trustworthy?
Longtime cryptocurrency holders often have concerns about the security and liquidity of third-party custody platforms and exchanges that hold cryptocurrencies on the behalf of investors. These concerns are backed up by frequent news of exchanges being hacked and subsequently, millions of dollars worth of cryptocurrencies stolen. The frustratingly drawn-out Mt. Gox bankruptcy case has also impacted both investors’ assets and the general reputation of cryptocurrencies. Cryptocurrency prices have been affected by investors who panic-sell on the news of a hack because they believe that their holdings are not secure.
This has led to the opinion of most long-term “hodlers” that the safest place to store cryptocurrencies is in a hardware wallet kept in a secure location by its owner. Hardware wallets are usually cryptographically secured and near-impossible to hack, although, unlike Bitfi, most major hardware wallet manufacturers have not made the false claim that they are completely unhackable. However, this method often trades liquidity for security, a trade-off that day traders may not want to make if they want to be able to react to breaking news within minutes.
A fully insured and regulated custody service may be attractive to these day traders because it says that they will at least get their money back if they lose their cryptocurrencies to a hacker. Kingdom Trust claims to follow stricter security, auditing, and record-keeping standards than most other cryptocurrency custodial services.
Kingdom Trust Also Releases Whitepaper
Kingdom Trust has also released a whitepaper describing its promise of “qualified custody” and especially touting its benefits to the cryptocurrency ecosystem. The custodial service is also fully regulated as a public trust company. As Matt Jennings put it:
“Qualified custody by a regulated, insured financial institution is a top priority and critical hurdle for institutions to invest in the digital asset markets.”
Kingdom Trust currently provides custody services for 100,000 clients with $12 billion in assets stored in company-owned vaults.