Definition ∞ Segregated Client Accounts are separate financial accounts maintained by an institution to hold client funds distinctly from its own operational capital. This practice protects client assets in the event of the institution’s insolvency or other financial distress. It is a fundamental principle of investor protection in traditional finance. This separation ensures client asset safety.
Context ∞ The concept of segregated client accounts is highly relevant in the digital asset space, particularly for cryptocurrency exchanges and custodians. News often highlights the risks associated with platforms that commingle client funds, leading to calls for stricter regulatory oversight. Future developments will involve clearer mandates for digital asset service providers to implement robust asset segregation to safeguard customer holdings. This will enhance consumer confidence in digital asset platforms.
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