eToro, the social trading application, is introducing a free insurance program for its traditional assets holders, offering up to £1 million ($1.26 million) in case the company becomes insolvent. However, cryptocurrency holders on the platform will not enjoy these privileges.
In an emailed statement to its customers, eToro confirmed a partnership with Lloyd’s of London, a U.K. based insurance and reinsurance market, to provide insurance to its traditional assets holders. The insurance is set to cover the investors with up to £1 million in case of "the unlikely event that eToro were to enter a state of insolvency."
According to the Financial Services Compensation Scheme (FSCS), investors trading in the traditional asset market are entitled to up to £85,000 in compensation. eToro offers a way higher compensation scheme for its investors – insuring up to £1 million in insolvency insurance “in accordance with the purchased policy.”
However, this insurance will not cater to the cryptocurrency holders on the platform, the statement clarified. Only the cash and traditional assets held in eToro accounts will be liable to the insurance policy aiming to bring “peace of mind” to its millions of customers.