Former Bittrex Executives Raise $40M in Bitcoin to Back Barbados-Licensed Insurance Firm
Tabit Insurance, a firm established by former executives from the now-defunct cryptocurrency exchange Bittrex, has launched with a $40 million insurance facility. What makes this noteworthy is the facility is funded entirely by Bitcoin (BTC).
The company is registered and regulated in Barbados.
In January, Tabit announced its plans to offer liability insurance policies for company directors and officers. These policies will be priced in U.S. dollars and backed by Bitcoin reserves.
The firm holds a class 2 insurance license from the Barbados Financial Services Commission.
Tabit aims to be the first regulated risk carrier to rely solely on Bitcoin reserves to write traditional insurance and reinsurance policies that are priced in U.S. dollars. This approach differs from the typical intersection of crypto and insurance, which often involves applying existing risk categories to digital assets custody.
Tabit’s model allows firms and individuals to use their Bitcoin holdings without engaging in trading or incurring substantial counterparty risk.
Stephen Stonberg, Tabit’s co-founder and CEO, stated that Bitcoin holders are invited to contribute assets to the firm’s segregated reserve system to earn yields of approximately 10%. The reserve system is managed using non-custodial technology provided by Fireblocks. Stonberg drew a comparison to the insurance industry practice where accredited investors, known as “Names,” deploy assets into insurance syndicates at Lloyd’s of London.
“For a technology like crypto, you may need a new underwriter, but the way the insurance is done is fundamentally the same as before,” Stonberg said in an interview. “We are holding our regulatory capital in bitcoin, and I think bringing in a new capital source to the insurance industry and innovating with the balance sheet is an opportunity that other people weren’t really looking at.”
