Capital Refund

Definition ∞ A capital refund involves the return of invested funds to participants in a financial operation or project. This action typically occurs under specific conditions, such as a project failing to meet its objectives or an oversubscription of an offering. It represents a reversal of an initial capital allocation. The process aims to restore capital to investors.
Context ∞ Capital refunds frequently surface in crypto news, particularly in the aftermath of failed initial coin offerings (ICOs) or decentralized finance (DeFi) protocols experiencing issues. Current discussions often relate to investor protection and the mechanisms for recovering funds in unregulated or partially regulated digital asset markets. The effectiveness of such refunds depends on the project’s design and legal frameworks.