Funds inside the accounts provided by Vivid Money SA
We protect your funds by storing them in one or several segregated accounts with credit institutions held separately from our own funds or, where possible, investing them in secure, low-risk assets in line with the applicable legal requirements, ensuring their complete safety. Please note that funds subject to pending settlement (e.g. card payments) may not be safeguarded, as they leave your account once authorization for the transaction is received. In case of an unlikely event of our insolvency, the funds kept in these accounts or low-risk assets will not be included in our liquidation estate according to applicable legal requirements and should be available to meet all the claims of the customers that hold the accounts with us.
Uninvested cash inside the Interest account and Crypto Earn account provided by Vivid Money B.V.
Vivid Money B.V. acts as an investment firm licensed by the Dutch regulator AFM, and offers, amongst other things, the Interest Account and Crypto Earn Account. As such, Vivid Money B.V. has a protection in place that secures funds for the whole amount, also above the amount of EUR 100,000 that would normally be covered by the national Deposit Guarantee Scheme (DGS) applicable to the banks where you can potentially deposit your funds.
Vivid Money B.V.’s protection scheme is also independent from the Vivid Money S.A. protection scheme mentioned above, as they are regulated entities that adhere to different safeguarding and safekeeping regulatory requirements.
How does this work?
Firstly we have set up a separate legal entity, Stichting Vivid Money, which is a safeguarding entity (foundation). This has as its sole purpose the safekeeping of users' funds and assets and therefore also has its own set of bank accounts. This entity is fully separated from Vivid Money B.V., so in case something happens to the investment firm, your assets are protected from any event and safeguarded separately. Vivid Money B.V. is also not allowed to hold its own funds in the Stichting as those should be kept fully separate as well.
On top of this, any cash you deposit on the Interest account of the foundation (e.g. because you want to benefit from the interest we pay to you on your balances) we will invest in so-called Qualifying Money Market Funds (like Goldman Sachs Liquid Euro - fund link). These funds are subject to very strict regulation (Money Market Fund Regulations) and are only allowed to invest in very safe assets like government bonds and offering the highest form of liquidity. Again, these assets are invested in the name of the Stichting and therefore separated from the assets of Vivid Money B.V. The Stichting is receiving the interest and can decide on the distribution over our users.
For Crypto Earn Account, funds shown in the Uninvested Cash section, will be allocated to EURC, a euro-backed stablecoin. This allocation is managed by Vivid Money B.V. and follows the same safeguarding logic: the stablecoin is held in the name of the Stichting and remains segregated from Vivid Money B.V.’s own assets.
The risk of these kinds of funds to potential losses from future performance are at a very low level, and poor market conditions are very unlikely to impact the Fund's capacity to pay out the funds invested. This is evidenced by the so-called Summary Risk Indicator (SRI), which is at level 1 from 7. This is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because the fund is not able to pay out. These funds use a benchmark Euro Short-Term Rate (€STR), meaning that they are trying to achieve this interest rate as a return for its investors. However these Money Market Funds do carry risks. For more information and details on these risks, please read our risk brochure as published on our website.
EURC, which is used for Uninvested Cash, is designed to maintain a stable 1:1 value against the euro. However, it is not fiat currency and may carry certain risks specific to digital assets, such as counterparty or technological risks. These risks are limited in nature but should be considered when using crypto-related products.
We believe that by organizing our safeguarding set-up like this, we can offer our users the safest way of protecting our users' funds and earn a market conform interest, even when the funds you have entrusted us with are higher than EUR 100,000. Even better, to any amount!
In case Vivid Money B.V. fails to meet its obligations related to the services and products it offers (e.g. by breaching applicable rules and regulations regarding asset segregation) these assets are additionally protected by the Dutch Investor Compensation Scheme, which provides protection in case Vivid Money B.V. goes bankrupt. If this happens, you can submit a compensation claim to DNB (Dutch regulator). The claim is limited to 100% of the value of your assets with a maximum of EUR 20,000.
To check our licensed entities of the Vivid Money group, you may check this link.