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The Canadian exchange Bitbuy offers 1: 1 Bitcoin deposit protection

May 28, 2020

The Toronto-based cryptocurrency exchange, Bitbuy now offers full insurance for all Bitcoin (BTC) depositsAccording to a press release that Cointelegraph announced on May 27, this is apparently the first in the industry.

The platform claims that The total value of your Bitcoin holdings in the cold store is secured through a partnership with Knox, a Canadian bitcoin custody account provider that typically serves institutional investors and service providers.

“The funds that Bitbuy transfers to our custody system are insured for the full value of the holdings, and this is effective immediately.” Alex Daskalov, CEO of Knox, told Cointelegraph.

The Canadian exchange Bitbuy offers 1: 1 Bitcoin deposit protectionThe Canadian exchange Bitbuy offers 1: 1 Bitcoin deposit protection

According to Daskalov Knox’s custody offer consists of a combination of proprietary software and hardware and “a sophisticated global logistics system that has been built and tested in battle for years”.

Knox calculates AUC rates of up to 100 basis points for its services, “while at the same time relieving the complexity of managing a globally distributed custody system”. Dean Skurka, Head of Finance and Compliance at Bitbuy, told Cointelegraph that any additional costs would be covered by the exchange and that this partnership would not introduce additional user fees.

“Our intention is to keep absolutely all of the user funds in a separate offline trust account secured by this partnership.”Skurka said, adding:

Knox has never lost Bitcoin, and this is an event with particularly low expectations. However, you are fully prepared to control the claims process with us if the unthinkable occurs. Each loss event would be carried out on a case-by-case basis. “

While Bitbuy lists six other cryptocurrencies in addition to Bitcoin, The insurance option is currently only available for BTC deposits. The exchange plans to expand the program in the future, but there is currently no set schedule.

The goal is to prevent a scenario like QuadrigaCX from occurring again

Both companies cite the infamous QuadrigaCX case, worth $ 190 million, as the starting point for their partnership. In January 2019, the exchange announced that its CEO, Gerry Cotten, had suddenly died of medical complications. This made all money on the stock exchange inaccessible that was supposed to be in a cooling account where only Cotten knew the password.

“QuadrigaCX has been a great wake-up call for this industry in Canada and indeed worldwide,” Daskalov said to Cointelegraph, adding:

“We believe that customers who do not want to store their own Bitcoin deserve the right to a method that does not involve the risks that people like those who have lost their participation in QuadrigaCX face.”