Definition ∞ Customer fund segregation is the practice of keeping client assets separate from a firm’s operational funds. This financial safeguard prevents the commingling of customer holdings with company capital. It protects customer assets from corporate insolvency or mismanagement. This measure is a fundamental principle of financial regulation, enhancing trust and security.
Context ∞ Customer fund segregation is a prominent topic in cryptocurrency regulation, especially following incidents involving platform bankruptcies. The debate often concerns the practical implementation of such separation in decentralized environments. Future regulatory efforts will likely strengthen requirements for digital asset custodians to ensure robust asset protection.
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