Investor Compensation Scheme

An investor compensation scheme is a statutory arrangement that pays out to customers, up to a limit, when an authorised firm fails and cannot return the money or assets it held for them. It exists in banking and in regulated investment services in many countries, and the reason it matters here is what it usually does not cover. Coverage is typically tied to a specific authorisation and to defined categories of protected claim, and holdings of crypto-assets at a platform often fall outside those categories even when the same company also holds a licence for something else. A firm may therefore be genuinely licensed, genuinely display a scheme's mark for its fiat or securities business, and still leave crypto balances entirely unprotected if it fails. Whether any scheme applies, to what, and up to what limit depends on the jurisdiction and on the specific permission the firm holds, which makes it a question to answer per firm rather than assume.