A statement from the company said the cover was provided by Lloyd's of London, and would insure against theft or loss of cryptocurrency held in a trading account with the company.
The announcement comes in the wake of news that the chief executive of a Canadian cryptocurrency exchange, Quadriga CX, died in December without giving anyone credentials to access an encrypted laptop on which digital wallets were stored. About US$145 million worth of cryptocurrencies are said to have been lost due to this.
Adrian Przelozny, chief executive and founder of Independent Reserve, said: “Institutions in Australia and overseas are cautious with regards to investing in cryptocurrencies and issues relating to regulation, price volatility and security are explored in depth.
The company said in the case of any incident, Independent Reserve customers would be compensated for any loss in their cryptocurrency holdings at the time of the incident.
“The acceptance of this policy by the largest insurer in the world is a vote of confidence in our corporate governance, robust risk management and security protocols and a sign of their commitment to working with only the highest quality partners,” Przelozny added.
Independent Reserve has been in existence since 2013 and says it has built a proprietary, institutional grade trading platform to allow Australians to buy, sell and invest in Bitcoin, Ethereum, Litecoin, Ripple and other digital currencies.
It claims to have more than 100,000 customers across Australia and New Zealand, and services about 8000 self-managed super funds.
Independent Reserve says it has worked closely with various Australian regulatory bodies including AUSTRAC to formulate AML/CTF regulatory frameworks for the industry.