Client assets are funds or holdings that a financial institution or service provider holds on behalf of its customers. These assets are legally distinct from the firm’s own capital and must be segregated to protect client interests. In the digital asset space, this often pertains to cryptocurrencies or tokens held in custody by exchanges or wallet providers. Protecting client assets is a fundamental principle of financial regulation and consumer trust.
Context
News regarding client assets in crypto frequently centers on security breaches, regulatory requirements for segregation, and insolvency proceedings. The lack of robust protection for client digital assets in some jurisdictions presents ongoing concerns for market participants. Discussions involve debates over self-custody versus third-party custody solutions and the need for clear legal frameworks.
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