First, distinguish whether the client holds assets or merely has a claim against the platform
If the arrangement is that the platform owes the client a sum of money, the client's claim may be a creditor's right; if the platform holds specific assets in custody for the client and local law recognizes their separate ownership, the handling path may differ. The contract, account and on-chain addresses, internal records and actual use of funds must be mutually consistent. Even if the books show a balance, it is still necessary to verify whether there are sufficient, identifiable corresponding assets that have not been improperly pledged.
For an omnibus account or omnibus wallet model, it should also be verified whether the platform can reconstruct each client's entitlements at any point in time. A sufficient aggregate balance does not mean that entitlements among clients are accurately attributed; where there are pending credits, pending refunds or unsettled fees, discrepancies may be concealed. In practice, client records, on-chain records and bank records can be independently reconciled, with the reasons for discrepancies and the persons handling them recorded. Whether reconciliation is performed by finance or outsourced does not change the operational need for the platform to know whether its records of client entitlements are reliable.
Fiat currency safeguarding and crypto asset segregation are not the same regime
The UK FCA requires applicable payment and e-money institutions to safeguard relevant client funds, and under the rules this may be achieved through segregation or insurance, guarantees and similar methods; this regime should not be directly applied to all crypto assets. Article 75 of the EU's MiCA, by contrast, imposes legal and operational segregation requirements on client crypto assets in respect of applicable custody services. Both regimes must be considered in light of the specific entity and asset type, and it cannot be inferred merely from the word "licensed" that all balances receive the same protection.
Hypothetical scenario: a separate wallet may still not match the books
Assume the platform places client coins in a dedicated omnibus wallet but lends part of them to an affiliate, while the back office still shows the full balance. Separating the address from the platform's own wallet does not resolve the problems of asset shortfall and client entitlement records. Even if a protective arrangement exists in law, return may be delayed due to reconciliation, disputes or insolvency proceedings; the FCA's user-facing guidance also cautions that safeguarding is not equivalent to deposit protection or a guarantee of immediate full return.
Rehearse in advance how returns would work after a failure
It should be verified whether client assets may be subject to set-off, liens or security in favor of banks, custodians or lenders, and lawyers in the relevant jurisdictions should assess their effectiveness. Prepare client balance, account, authority and contact information that receivers can use, and regularly verify that the books match the assets. Where a shortfall is identified, it must not be concealed through deposits from new clients; it is necessary to escalate promptly, stop expanding the risk, and assess top-up and disposal arrangements in accordance with law.
Recommended actions
- Determine the applicable safeguarding regime separately for fiat currency, e-money and crypto assets.
- Cross-check account contracts, security documents and internal ledgers to identify misappropriation of assets.
- Simulate the platform ceasing operations to test whether third parties can identify customers and return assets in accordance with the law.
This content is for general information only and does not constitute legal advice. Please consult a qualified lawyer about specific matters.
References
- Safeguarding requirements for payment institutions and electronic (e-money) institutions — UK FCA
- Using payment service providers — UK FCA
- MiCA Article 75: Providing custody and administration of crypto-assets on behalf of clients — ESMA / EU legislature
