EU CRYPTO REGISTER · GLOSSARY · LAST VERIFIED
What is client asset segregation under MiCA Article 70?
MiCA Article 70 requires authorised CASPs to segregate client crypto-assets from their own assets, to maintain accurate records of client holdings, and to avoid using client assets for the CASP's own account. This is the ring-fencing rule that distinguishes MiCA-authorised custody from unsupervised models.
What is the exact legal definition?
MiCA Article 70(1): "CASPs that hold crypto-assets belonging to clients shall make adequate arrangements to safeguard the ownership rights of clients, especially in the event of the insolvency of the CASP, and to prevent the use of clients' crypto-assets for own account except with the clients' express consent." Source: Article 70 MiCA.
What does it actually mean in practice?
Segregation in practice. Client crypto-assets must be held in wallets or accounts separately from the CASP's own crypto-assets and in a manner that preserves the client's ownership rights in an insolvency. The exact technical implementation (separate addresses, omnibus structures with sub-ledger accounting, hardware-security-module key management) is left to the CASP, subject to NCA supervision.
Record-keeping. Article 70(2) requires CASPs to maintain records and accounts enabling them to distinguish at any time and without delay the crypto-assets held for one client from those held for any other client and from the CASP's own crypto-assets.
The 'own account' prohibition. Without explicit client consent, a CASP may not use client crypto-assets for its own account, for example to back its own trading positions, to lend, or to stake. Client consent must be explicit and granular; bundled into general terms of service is unlikely to satisfy supervisory expectations.
What Article 70 is not. It is not a deposit-guarantee scheme. If a CASP fails despite Article 70 compliance, the client's claim is to its own ring-fenced crypto-assets, not to a public insurance payout. National insolvency law determines how the ring-fence is enforced in practice.
Where do we see this in the public record?
| Example | What it shows |
|---|---|
| What is required | Separation of client crypto from CASP's own crypto, with auditable records |
| What is prohibited absent consent | Use of client crypto for CASP's own trading, lending, staking, or borrowing |
| Audit/reporting requirement | Sufficient records to identify client holdings at any time |
| Limitation | Not a deposit-guarantee scheme; insolvency claim is to the ring-fenced assets themselves |
What else do users ask about this?
Does Article 70 apply to staked assets?
Yes. If a CASP stakes client crypto-assets on a proof-of-stake network, that requires the client's explicit consent and must not commingle the staked assets with the CASP's own staking pool in a way that defeats the segregation.
What happens if a CASP fails despite Article 70?
The segregated client assets are not part of the CASP's insolvency estate (subject to national insolvency law). The client recovers its own ring-fenced holdings; it does not receive a public insurance payout.
Is the segregation technical or accounting?
Either or both, as long as the substantive ring-fence holds in insolvency. Pure accounting segregation with shared technical wallets is allowed if the sub-ledger is robust and the legal claim survives an insolvency challenge.
Which sources is this entry based on?
- MiCA Article 70 - Safekeeping of clients' funds and crypto-assets
- MiCA Article 75 - Custody and administration of crypto-assets on behalf of clients
- MiCA Article 67 - Prudential requirements
- Regulation (EU) 2023/1114 (MiCA) on EUR-Lex
Glossary entries on The Crypto Register are sourced from primary legal texts (Regulation (EU) 2023/1114, ESMA guidelines, national regulator publications). They are not legal advice. Last verified .