The recent Quadriga scandal has many cryptocurrency investors putting their guard up, and for good reason…
Last month, approximately $145,000,000 worth of customer’s digital tokens were lost with the passing of the company’s Chief Executive Officer, Gerald Cotton!
Quadriga took security measures to an extreme and it came back to bite them in the end.
Cotton appears to have been the only person with access to any of these locked accounts and now that he’s gone, so are MILLIONS of encrypted funds.
Congratulations if you managed to dodge the bullet on that one, just know that this mishap has pushed the companies behind these digital coins to pick up the slack so something like this doesn’t happen again.
Let me explain…
Because of Quadriga’s dilemma, BitGo Inc., a startup backed by big-name companies such as Goldman Sachs, has stepped up to the plate to offer investors more protection.
To do this, the company has obtained an insurance policy that covers as much as $100 million of offline storage accounts.
Although traditional bank deposits are insured up to a certain amount, crypto deposits often are not. But this latest cautionary tale in the unregulated world of crypto has changed that.
BitGo understands that people are going to proceed with caution from here on out when it comes to investing in these digital coins and they want to give them peace of mind.
Sure, some degree of insurance did exist in the market prior to this scandal, but it wasn’t anything close to the kind of coverage BitGo now has to offer.
As the saying goes: “every cloud has a silver lining”.
There’s no denying the fact that Quadriga’s inaccessible money is a tragedy for customers, but the industry seems to have learned from the mistake.
To say the least, the amount of insurable crypto funds that BitGo has brought to the table is a game changer and most definitely a step in the right direction.
It’s innovation like this which will add more legitimacy to crypto over time and make it even more legitimate in comparison to traditional ways-to-pay.
The evolution of cryptocurrency is a trial and error process at its finest, but every day more and more wrinkles get ironed out. BitGo has just smoothed out a big one and because of that other companies are sure to follow in its lead.
