As cyber attacks continue to rise, the Gibraltar Blockchain Exchange (GBX), one of the world’s leading institutional-grade token sale platforms and renowned cryptocurrency exchange, on December 11 announced an insurance coverage policy in association with Callaghan, a Gibraltar-based firm. With this new insurance coverage, the assets that are listed on the GBX Digital Asset Exchange (GBX-DAX), a secondary exchange for the trading of digital assets, can be insured. These assets will include both hot and cold wallets.
“We are delighted to announce the introduction of insurance coverage … this represents an important step in attracting users who require strict assurances around the security of their assets,” Nick Cowan, chief executive officer of GBX, said.
Cowan has been very vocal about the tremendous efforts that his company has been making to build a platform that is focused on the “highest regulatory standards and the strictest due diligence processes”. This means that all the digital currencies held for investors by the exchange will be covered this providing “providing additional reassurance to a wide variety of traders around security and transparency”.
Dealing with Cyber Attacks
At the moment, cyber attacks are very common in the rapidly growing cryptocurrency industry. In fact, it is estimated that losses incurred by various crypto-related business have clocked in at about $930 million in just the last year – this is according to reports by Ciphertrace, a US-based security firm.
With such huge numbers up in the air, there has been a lot of panic in the space and more companies have come to the realization that the not only need to strengthen their cyber defenses in order to safeguard investor funds but also buy insurance to cover all the potential losses. This is particularly extremely important in the crypto industry which is known for drawing in a fair share of unsophisticated investors most of whom trade with insane degrees of naivety due to the allure of the promise of quick riches.
Investors and digital currency holders aside, the crypto market has been struggling to build confidence but the incidents of fraud and cybertheft amidst the lack of proper regulatory oversight (mostly) does not really help the market’s case. Furthermore, most of these exchanges still have to worry about the high costs that are associated with investigating and fixing loopholes in case such events as hacks, loss of public relations and the collapse of business ventures occur. GBX’s decision to opt for cyber insurance is, therefore, a highly welcomed development, one that will hopefully be adopted by several other businesses.
Gibraltar has long been championing cryptocurrency development and is considered to be a major hub for the crypto market. The European territory has contributed to a number of potentially revolutionary technologies including a purpose-built distribute ledger regulatory framework that was introduced last year.