How commingling happens
- Customer receipts land in the company's operating account
- The firm's fees or revenue are left sitting in the customer account
- Customer balances are used to cover expenses or another customer's payout
- Client crypto-assets and the firm's own share one wallet
Commingling rarely starts as a decision. A missing account, a late sweep or a ledger that cannot split one bank balance by owner is enough.
What the rules say about commingling
In the EU, Article 10 of PSD2 says that funds safeguarded by segregation shall not be commingled at any time with the funds of anyone other than the payment service users on whose behalf they are held. The entry on safeguarding covers the full duty, and the UK's rules.
MiCA applies the same idea to crypto. A crypto-asset service provider keeps clients' funds in an account separately identifiable from its own (Article 70), and a custodian segregates clients' crypto-assets from its own holdings, on the distributed ledger too (Article 75).
Why commingling matters
Segregation is what lets customer funds be identified and returned if the firm fails: PSD2 has them insulated from the claims of the firm's other creditors, in particular in an insolvency. The daily test is reconciliation: the ledger's total of customer balances against the money in the segregated accounts.
Commingling or pooling?
- Pooled account
- Many customers' funds held together in one account that contains no money of the firm, with a ledger showing each customer's share. PSD2's ban is on mixing with anyone else's funds.
- Segregation
- The opposite of commingling: customer funds and assets kept apart from the firm's, in accounts and in records.
Where Commingling shows up in a platform
Modules that do the work
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- Accounts & IBANsCustomer accounts with their own IBANs, on the partner bank and the rails you choose.
- Custody & walletsWallets on every major chain, with MPC custody from leading providers or your own keys.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
Platforms that need it
Guides that go deeper
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/2366, PSD2, consolidated: Article 10 (EUR-Lex)
- Regulation (EU) 2023/1114, MiCA, Articles 70 and 75 (EUR-Lex)
General information, not legal advice: what applies to you depends on your services and your market.