New insurance facility for custodians of digital assets

A new insurance facility for custodians of digital assets, including financial institutions has been launched by Marsh. The broker said it is the largest facility of its kind, providing insurance capacity up to $825m, and is backed by Lloyd’s syndicates and London-based international insurers.

The facility is available to Marsh clients globally and will support those organisations with digital assets held offline – known as cold storage – as well as those seeking to cover certain elements of risks for assets secured by multi-party computation or other custody solutions that do not operate entirely offline, said Marsh.

According to Marsh, the facility will support organisations in protecting their digital assets against risks related to physical natural perils, third-party physical theft, and internal collusion by those employees responsible for secure storage.

The facility was developed by Marsh Specialty’s digital asset team in New York and London, which offers risk transfer solutions to firms globally that operate in the areas of blockchain, cryptocurrency, and digital assets.

Jacqueline Quintal, global digital asset leader, Marsh Specialty, said: “We anticipate continued focus on and activity in the global digital assets space, as organisations navigate the complex risk environment and interconnected, expanding ecosystem of stakeholders. Marsh’s facility provides custodians with protection for the key operational risks they face in the management of digital assets; we look forward to supporting clients globally in aligning their risk financing and evolving commercial strategies, as they focus on building their operational resilience and market presence in this fast-growing sector.”

Marsh said organisations in a wide array of industries are seeking to establish themselves as key players in custody following a decade of substantial growth and maturation of the digital asset market. According to Marsh’s Global Technology Industry Risk Study 2023, 50% of respondents in the global technology industry are already operating in or exploring opportunities around digital assets. Further, 136 US banks under the Federal Deposit Insurance Corporation are planning or are already involved in various initiatives related to digital currencies.

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