Crypto insurance firm Evertas has raised $14 million in funding, emphasizing the need for certainty amidst the negative downturn of the crypto market.
The $14 million Series A round, which was pioneered by Polychain Capital, brings the firm’s total outside investment to $19.8 million, following the $5.8 million acquired in seed funding last year.
Many cryptocurrency exchanges have not insured wallets against theft, natural disasters and hacks due to the high premiums and unclear policy definitions. However, in this delicate period of unexpected meltdown, securing insurance for assets ensures a third-party professional underwriting firm has checked and evaluated a firm’s systems and controls, according to Evertas CEO, J. Gdanski.
What Evertas CEO has to say…
Gdanki highlighted that Evertas has been in a constant dialogue with the U.S Securities and Exchange Commission (SEC) about the pros of incorporating insurance and measures by which insurance could be made an effective stand-in for policy incorporating when it comes to a evolving technology such as custodial crypto— a need that is urgent considering FTX’s drastic meltdown, he mentioned.
“There are things that come out of these massive crises in the space that we’ve had in our underwriting for three or four years,” Gdanski said in an interview with CoinDesk. “That includes things like trust accounts, segregation of assets, clear delineation of ownership in the event of bankruptcy or insolvency, having appropriate boards in place.”
Also included in the Series A round were: SinoGlobal Capital, CMT Digital Ventures, Foundation Capital, Morgan Creek, Bloccelerate, network0, Matrixport, and HashKey. Individual investors include Balaji Srinivasan, Andrew Keys, Colleen Sullivan, Patrick McDonald and David Roebuck.
Outside of Evertas, the crypto insurance space has almost no true and dedicated experts, according to investor Andrew Keys, co-founder of advisory firm Darma Capital.
“The incumbent carriers and reinsurers writing the occasional crypto policy are staffed by insurance generalists analyzing these very specialized risks, part-time; they’re in way over their heads and that’s unsustainable,” said Keys in a statement.
Evertas & Llyod’s approval
Evertas in the early part of this year secured a milestone achievement after it successfully clinched the approval to call itself a Lloyd’s of London coverholder. This achievement is a staggering and immense one as coverholders are speciality insurance suppliers licensed by Lloyd’s— the 336-year-old general insurance market, to curate and oversee regulations governing risk in different zones and sectors.
This achievement ensures that Evertas stands out amongst its equals as the first coverholder at Lloyd’s to categorically look out for virtual wallet assets and curate regulations as delegated by Lloyd’s syndicate member Arch Insurance—another firm which also served as fulcrum behind Evertas’ successful coverholder application.
“Our approval of Evertas’ coverholder application is an example of collaboration between Lloyd’s insurer Arch and their new distribution partner on an innovative solution aimed at facilitating the growth of an industry sector previously hindered by a lack of risk transfer options,” said Hank Watkins, president of Lloyd’s in the Americas, in a statement.
Evertas CEO J. Gdanski said his team has worked long and hard to define a policy framework for the risks related to typical classifications such as “hot,” “warm” and “cold storage” of digital assets.
“We’ve come up with the most comprehensive policy form and product that’s out there, where it’s very clear what is and is not being covered, resolving a lot of the legal ambiguities and technical inaccuracies,” said Gdanski in an interview.
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