CoinCorner eMoney accounts are provided in partnership with Modulr*, who are a regulated Electronic Money Institute (EMI). All EMIs are required by law to use a process called 'Safeguarding' to protect customer money. This means it ensures that 100% of the funds it receives in exchange for eMoney are safeguarded on receipt, meaning that these are segregated from all other funds that it holds and cannot be used for any other purpose. 100% of the funds it safeguards must be held in specially designated client accounts at credit institutions (banks) or the Bank of England.
Furthermore, as an EMI, Modulr must also hold an additional 2% of the total value of safeguarded client funds in its own funds, which are held separately to those client funds. The purpose of the additional 2% funds is to ensure that, in the case of any problems with its business, there are enough funds to support an orderly business wind-down and the process of returning of client funds. Combining this 2% requirement with the safeguarding means that customer funds are 100% available to a customer, and there is a protection mechanism to help ensure an orderly wind down if ever required.
Does the Financial Services Compensation Scheme (FSCS) apply to eMoney accounts?
The FSCS is not applicable to eMoney, however the regulatory requirements outlined above can be relied upon instead and protect the full balance of customer funds, as opposed to only compensating up to a limit of £85,000, as is the case with the FSCS.
Customers with Euro accounts are also protected through the same Safeguarding process with regulation being provided by the Dutch regulator De Nederlandsche Bank (DNB).
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