Reinsurance News

Arch & Marsh develop $150mn policy for crypto security firm Ledger

15th November 2019 - Author: Matt Sheehan

Arch Insurance (UK) Limited and Marsh have collaborated to provide a customised crime insurance program that covers digital assets secured by the Ledger Vault platform.

crypto-currencyLedger Vault is a core business unit of Ledger, a security firm for cryptocurrencies and blockchain applications.

It provides information technology infrastructure for financial institutions to securely control their crypto assets.

This program from Arch and Marsh will insure crypto assets for up to $150 million against a range of criminal risks.

These include third-party theft of the master seed and private keys following a physical breach of a hardware security module in a secure data center.

The policy also covers secure transmissions of the master seed fragments as part of the client onboarding, and insider Ledger employee theft caused by collusion.

All coins and tokens currently supported by the Vault platform are covered by the Ledger Vault policy, and there is also a mechanism to add new coins/tokens to the policy coverage as necessary.

As a security technology platform Ledger Vault is not required to obtain digital asset insurance, unlike custodians, banks and exchanges.

However, by securing this coverage, the firm can save its clients the time and expense of undergoing independent insurance security evaluations.

Vault clients also have the opportunity to directly purchase their own primary coverage as needed on top of the Ledger Vault policy.

“We consider insurance a crucial part of a comprehensive plan as digital assets gain a foothold in institutional portfolios,” said Pascal Gauthier, Chief Executive Officer at Ledger.

“As a new class of assets, securing digital currencies has become a complex challenge for both institutions and insurers,” he explained. “Through our efforts with Marsh and Arch to curate this comprehensive crime insurance policy, we are playing a pivotal role in the movement to secure and insure all critical digital assets.”

James Croome, Vice President of Specie at Arch, also commented: “We spent over 6 months working with the Ledger Vault team to develop a customized offering for their clients.”

“Ledger took the time to educate us on every detail of the end-to-end security and governance that the Vault platform provides. This $150 million policy underscores just how impressed we are with the security technology platform they’ve built.”

Jennifer Hustwitt, Senior Vice President with Marsh’s global Digital Asset Risk Transfer Team, further stated: “As this asset class matures, we are focused on structuring insurance programs that align with how the underlying technology functions. This Ledger insurance program marks the next chapter in the burgeoning insurance market for digital asset risks.”

Finally, Demetrios Skalkotos, Global Head of Ledger Vault, said: “The combination of Ledger Vault’s secure hardware and software operating systems, along with our governance protocols, allowed Marsh and Arch to expand standard cold storage coverage to the Ledger Vault solution.

“The policy also covers the clients’ onboarding process, their personal security devices and the secure encrypted communication channel that is established when using the Vault platform,” Skalkotos added. “This unique policy is a true end-to-end solution that gives our customers the flexibility to both store and move funds without compromising on security and governance.”

Ledger Vault’s customer base is made up of 40 clients across the APAC, EMEA and the Americas regions, and includes family offices, exchanges, trust and payment companies, and clients such as Bitstamp, Uphold and

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