Tabit Insurance, a Barbados-regulated insurance company created by former leaders of the now closed Cryptocurrency exchange Bitrex said it raised a $ 40 million reserve, composed solely by Bitcoin (BTC), which was written traditional insurance and reinsurance business.

The insurance company, which emerged in January this year with plans to offer Bitcoin-supported responsibilities for corporate directors and officers (D&O), claim to be the first regulated risk company to rely on only bitcoin reserves to write traditional policies priced in US dollars. The company has an insurance license in Class 2 from Barbados Financial Services Commission.

Crossover between crypto and insurance usually involves shoe hire of existing risk categories for loss and theft to cover hot and cold versions of the custody of digital assets. Tabit’s approach is interesting because it explores ways in which companies and individuals can benefit from their Bitcoin stocks without getting involved in trade or incuring a significant counterparty risk.

Tabit co-founder and CEO Stephen Stonberg said Bitcoin holders are encouraged to contribute assets to the company’s system with separate reserve cells administered using non-parenting authority from Fireblocks, to earn yields of approx. 10%. A good analogy from the insurance world is the way accredited investors, known as “names”, implement assets in insurance syndicates of Lloyd’s of London Insurance Market.

“For a technology like Crypto, you may need a new insurance company, but the way the insurance is carried out is basically the same as before,” Stonberg said in an interview. “We have our regulatory capital in Bitcoin, and I think that bringing a new source of capital into the insurance industry and innovation with the balance is an opportunity that other people did not really look at.”