A new Canadian crypto custody provider launched on Tuesday 24, and claims to offer up to 100% insurance cover for clients’ assets.
KNØX, backed by Fidelity Investments Canada, has officially began operations, according to an announcement made on Tuesday. The new business said it recently raised $6.2m in funding spearheaded by Initialized Capital and iNovia, with participation from Fidelity Investments Canada, Ferst Capital, and FJ Labs.
Alex Daskalov, co-founder and CEO of KNØX, said that the round officially closed in June 2018, and that the company had been operating “silently” since then. Now with the public launch, financial institutions, exchanges, including asset managers, and liquidity providers, can sign up to KNØX’s services.
KNØX said it offers almost 100% insurance coverage through its partner and insurance giant Marsh.
“Our custodial service capable of insuring the full value of a customer’s assets,” said Daskalov. Other offerings in the marketplace provide “a false sense of security,” KNØX claimed.
Giving an example, KNØX said:
“A customer with $100 million in digital assets may choose to keep their funds with a custodian holding $1 billion in assets, and advertising a $100 million insurance policy. The custodian is 10% insured, yet the customer is given a false sense of security believing that the $100 million policy will be able to cover their holdings. In fact, in the event of a total loss, the customer will be reimbursed $10 million, forced to accept a $90 million loss. The total limit is most commonly shared across clients.”
Marsh SVP, Jennifer Hustwitt, added: “There are a wide range of risks related to crypto assets that remain uninsured, but the insurance market for digital assets is expanding. Over the past six months, we have seen a net expansion of insurance capacity as the technology continues to mature and regulatory frameworks emerge.”