GK8, the high-security custody solution for safeguarding and managing digital assets, announces its product is now insurable via Aon UK Ltd utilising insurance provided by a panel of insurers led by Arch Underwriting at Lloyd’s Syndicate 2012, which is part of the Lloyd’s insurance market.
GK8 clients can activate the insurance policy to protect their assets under custody at a coverage cap of potentially $500 million. The company’s custodian technology is already operational and helps to securely manage digital assets for world renowned companies like eToro.
The move marks a major breakthrough for GK8 and its institutional clients, as one of the world’s most trusted insurers places its stamp of approval on the company’s cold wallet. As with any blossoming asset class, digital securities bring with them new insurance needs. The premium insurers earn from blockchain-powered businesses are modest to date, but the market is beginning to accept that they, too, have much to offer in their risks-versus-rewards equation.
The Aon policy now available for GK8 clients is designed to cover internal theft, as well as external theft, loss, damage, or destruction of the assets stored in their cold wallet. The premium is comparably low for two reasons. First, the need for insurance highly depends on how the client utilizes the security and processes provided by GK8; Second, GK8’s technology was evaluated as having extremely low risk. The company held a successful bounty program in February, in which it dared more than 700 hackers to breach its cold wallet for a bounty of $250,000 in Bitcoin. None were successful.
With the backing of six pending patents endorsed by renowned industry and academic experts, GK8 combines its unreachable cold wallet with an ultra-secure MPC wallet to change the Return On Investment (ROI) for hackers. The cold wallet, which only transmits data and therefore totally unhackable, protects the vast majority of the transaction, while the MPC wallet protects the rest. This means a hacker would have to invest much more in breaking into the MPC wallet than they could ever gain from stealing from it. GK8’s solution therefore enables hot-wallet functionalities through its MPC, all while leveraging the security standard of the fully hack-proof cold wallet.
GK8’s on-site digital asset custody system combines a hack-proof digital wallet with a new class of MPC, that together implements unprecedented level of risk assessment and mitigation, with institutional-grade compliance, seamless API integration, and low transaction fees. The technology allows financial institutions to receive high access to digital assets and related information without compromising on security, as it enables the institution to execute the entire digital asset management process, including sending a signed transaction to the blockchain, without direct or indirect Internet connection.
“We have worked hard to demonstrate the validity of GK8’s solution to insurers so that the company’s clients can benefit from pre-negotiated insurance coverage to protect the digital assets in their care, custody, or control,” says Tom Davis, Client Director of Aon UK Ltd. “As such, we’re excited to facilitate this offering to clients of GK8 who comply with the company’s security recommendations.”
“Often, we see people purchase an insurance policy and then hold in the aggregate funds well above the limit of that insurance policy,” says Lior Lamesh, CEO of GK8. “So for us, it was an important guarantee that when a customer is on-boarded to our platform, the full value of their assets is insured.”