Canadian crypto firm will offer full insurance coverage of client assets

Canadian crypto services provider KNØX officially launched this Tuesday with the support of investment firm Fidelity. Earlier the company attracted $6.2 million from Initialized Capital, iNovia and other investors.

As KNØX was informed, they closed their investment round in June 2018 and since then have been providing services in a non-public mode. Now the companies can use the services of third party financial institutions, including asset managers, liquidity providers and stock exchanges.

According to KNØX, the main distinguishing feature of the service is the availability of full insurance coverage for all the assets in its stores, provided by Marsh.

KNØX claims that other custodial services provide its clients with a "false sense of security".

"A customer with $100 million in digital assets may decide to provide funds to a custodian who holds $1 billion and offers a $100 million insurance policy. The custodian is 10% insured and the customer has a false sense of security because he thinks that the insurance covers his assets completely. In fact, in the event of a complete loss of funds, only $10 million will be reimbursed to the client and his loss will be $90 million. The total limit is usually distributed to all clients," the company explained.

At the same time, KNØX recognizes that the insurer's capacity is not unlimited, but is ready to accept deposits from customers in excess of $100 million, the coverage of which will not be a problem, she promises. Until then, the Coinbase exchange had the largest amount of insurance coverage of all known cryptocompanies - its assets were insured for $255 million.