Segregated funds are customer money held in accounts kept separate from a firm's own money, so it is used only for customers and can be returned to them if the firm fails.
Last reviewed 1 December 2025 · Regulatory position as of 23 June 2026 · Educational, not advice
Segregation is the practice of keeping customer money apart from the money a firm uses to run its own business. When funds are segregated, the firm cannot treat your deposit as its own working capital. The money sits in designated customer accounts, and the rules say it can be used only to support customer trading and transactions. The point is simple. If the firm runs into trouble, customer money should be identifiable as customer money rather than mixed into the firm's general assets.
In the United States, this idea is written into law and regulation. The Commodity Exchange Act and rules from the Commodity Futures Trading Commission, the CFTC, require firms known as futures commission merchants to segregate customer funds from their own and to account for them separately. As of 23 June 2026, CFTC Regulation 1.20 sets out that requirement, and firms must obtain written acknowledgements from the banks or clearing organisations that hold the money, confirming it is held in segregation. Different categories of customer money are kept in their own pools and generally cannot be commingled.
The reason segregation matters to you is insolvency. If a firm holding your money were to fail, segregated customer money is meant to be ring fenced so it can be returned to customers rather than swept up by the firm's creditors. That is the protection segregation is designed to give. It is a meaningful safeguard, but it is not a guarantee. Segregation does not insure you against market losses, it does not promise that every shortfall will be covered, and it does not remove every risk that comes from fraud or operational failure. It lowers one specific risk, the risk that customer money is treated as the firm's own.
Segregation also is not universal. The rules apply to certain regulated firms and structures, and arrangements vary from one platform to another, especially between regulated venues and offshore ones that may sit outside this framework entirely. Some platforms hold customer balances in ways that are not the same as the segregation a regulated futures firm must follow. That is why it pays to read how a given platform actually holds customer money rather than assuming it is protected. Segregation sits close to two other ideas, custody, meaning who holds your money and how, and counterparty risk, meaning the risk that the other side of your arrangement fails to perform.
Imagine you deposit one hundred dollars with a regulated firm that segregates customer funds. Your money is recorded in a customer account and held at a bank that has acknowledged in writing that the balance belongs to customers, not to the firm. If the firm later became insolvent, that segregated balance is meant to be identified as yours and returned, rather than pooled with the firm's own assets for its creditors. Segregation does not protect you from a trade that loses money. It protects the money you have not put at risk from the firm's own failure.
Illustrative only. Numbers are examples, not a quote or a prediction. Protections and outcomes depend on the firm, the rules that apply, and the facts of any insolvency.
Segregation protects customer money from a firm's own failure, but it does not make trading safe or guarantee you get everything back. Prediction markets can lose you money. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
Segregated funds are customer money held in accounts kept separate from a firm's own money. The aim is that customer money is used only to support customer trading and can be identified and returned to customers if the firm becomes insolvent. In the United States, CFTC rules require futures commission merchants to segregate customer funds from their own.
No. Segregation is a protection, not a guarantee. It is designed to keep customer money separate and easier to return, but shortfalls, fraud, or operational failures can still cause loss, and outcomes in an insolvency depend on the facts. Treat it as one safeguard among several, not as deposit insurance.
Custody is who holds your money or assets and how. Segregation is a rule about keeping customer money apart from the firm's own money. A custodian can hold funds that are also segregated, so the two ideas overlap but are not the same. Check how a given platform structures both.
Not necessarily. Segregation rules apply to certain regulated firms and structures, and arrangements differ from one platform to another, especially between regulated venues and offshore ones. Read the platform terms and verify how customer money is held before you deposit, since this is a key part of counterparty risk.
The rules change fast. Get the changes that affect you, plain and current, not tips.
Independent. Every claim dated and sourced. No platform pays for its place.