Definition ∞ Customer fund loss refers to the unfortunate circumstance where client assets held by a digital asset service provider become unavailable or are permanently lost. This can result from various events, including exchange hacks, operational errors, insolvency of the platform, or regulatory actions. Such incidents severely damage consumer trust and often lead to significant financial distress for affected individuals.
Context ∞ News about customer fund loss consistently prompts discussions about the importance of self-custody, regulatory protections, and the implementation of robust insurance schemes for centralized platforms. The industry seeks improved transparency and accountability from service providers to prevent future occurrences and protect user holdings.
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