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Boost Insurance and Breach Insurance have launched the first and only regulated insurance product for cryptos available to retail wallet holders, Crypto Shield, which will cover up to $1 million in cryptocurrency theft while in the custody of a qualified custodian.
The launch of Crypto Shield, prompted by a surge in hacks last year, is backed by reinsurance partner Relm and enables investors to purchase protection for their crypto wallets held on Binance, Coinbase, Gemini and CoinList.
Alex Maffeo, CEO and Founder of Boost Insurance, told GOBankingRates that Crypto Shield gives individual crypto wallet holders access to regulated insurance protection for their digital assets, something that was previously only available to commercial entities like exchanges.
“It matters because the crypto space right now is kind of like the wild west — there was something like $3 billion in crypto stolen in 2021, and up until now there was no real way for the average person to secure their investment,” Maffeo said. “They just had to hope that their custodian had enough commercial insurance to cover the loss if the custodian were hacked. In that sense, what Crypto Shield achieves is that it makes crypto investing safer.”
Maffeo explained that Breach envisioned this product as a solution to the protection gap that currently exists for individuals holding cryptocurrency and was developed to provide consumers with an alternative to Federal Deposit Insurance Corporation (FDIC) and SIPC (Securities Investor Protection Corporation) coverages, as these protection layers are unavailable for crypto investors. He added that Boost’s insurance infrastructure-as-a-service enabled the product to be developed and brought to market at a fraction of the time and cost that would have been required to create it from scratch.
“Creating new insurance products is a long and complicated process, with a lot of regulatory and financial requirements,” Maffeo said. “How Boost’s insurance infrastructure-as-a-service platform works, we’ve already done the hard work on that. We’ve assembled the insurance and technology experts, the compliance resources, and the insurance/reinsurance partners, and we’ve built the technology to seamlessly deliver and manage the products in a 100% digital experience.”
“When partners like Breach come to us with an idea for a new kind of insurance product, we can help build it and get into market much more quickly than they could on their own,” he added.
Maffeo said that as crypto is a relatively new area of risk, they had to “break a lot of new ground figuring out what to cover, how to price it, and similar issues.”
“We also had to seek out additional reinsurance partnerships to fund the product — that’s how we ended up partnering with Relm Insurance. Relm specializes in the crypto space, and we’re excited to be able to work with them on an innovative product like this one,” he said.
The product is targeting consumers using the Binance US, Coinbase, CoinList and Gemini exchanges, and there are plans ‘to expand beyond that,’” according to Maffeo.
“Our goal is to increase the accessibility of insurance for the crypto retail wallet holder and we want any individual to be able to insure their cryptocurrency,” Maffeo said. “The product covers up to $1 million in cryptocurrency holdings and the pricing is based on a percentage of the total value insured, and takes into consideration factors like where the wallet is housed and which coverage options are selected.”
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