Fund segregation is the practice of keeping client assets separate from a financial institution’s operational funds. This measure protects client investments in the event of the institution’s insolvency or bankruptcy. In the digital asset space, it ensures that cryptocurrency exchanges or custodians cannot use client funds for their own purposes. This is a fundamental principle of financial security.
Context
Discussions about fund segregation are particularly prominent in cryptocurrency news following exchange failures or regulatory reviews. Reports often highlight the importance of robust segregation policies for investor protection and market integrity. Understanding this concept is vital for assessing the security and trustworthiness of digital asset platforms and related regulatory developments.
A centralized exchange's internal system failure enabled an unauthorized transfer of $30.4M in Solana-based tokens, underscoring systemic hot wallet risk.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
