Where your money sits when you deposit to Fundly
A plain explanation of what happens to your crypto after it arrives, who holds the resulting balance, and what protects it.
If you are going to send money to a company you found on the internet, you should know where it goes. This post answers that question for Fundly as directly as we can before launch, including the parts that are still being finalised.
We are not a bank and we do not hold a banking licence. That sentence is going to appear several times, because it changes how everything else works.
The three stages of a deposit
Money passing through Fundly is in one of three states, and each one is held differently.
Stage one: crypto in transit. You send USDC, USDT, ETH or another supported asset to your deposit address. While the transaction is confirming, the asset is on the chain, controlled by the crypto-asset service provider that operates our deposit infrastructure. This stage lasts from seconds to about half an hour depending on the chain.
Stage two: conversion. Once confirmed, the crypto is converted to your account currency at the published reference rate, with the deposit fee shown before you sent. This is near instant. After it, there is no crypto anywhere in your Fundly account. We do not hold crypto on your behalf beyond this moment.
Stage three: a currency balance. The EUR or USD that results is held by our regulated account partner, an authorised electronic money institution or credit institution in a supported jurisdiction. This is the balance your card spends from and, on the Verified tier, the balance behind your IBAN.
What "safeguarded" means
Electronic money institutions in the EU and UK are required to keep customer funds separate from their own money. The usual method is a segregated account at a bank, held on behalf of customers, that the institution cannot use for its own operations. If the institution fails, those funds are ring-fenced for customers and are not available to its other creditors.
That is what "safeguarded" means when you see it in our fine print. It is a legal requirement on the partner, audited and supervised, not a marketing promise from us.
It is also not the same as a deposit guarantee scheme. Bank deposits in the EU are typically covered up to 100,000 EUR by a national guarantee scheme. Safeguarded electronic money is protected by segregation instead. The mechanisms are different and we will not blur them. Unless the account terms say otherwise, your Fundly balance is not covered by a deposit guarantee scheme.
Segregation protects you against the partner failing. It does not make your balance a bank deposit.
What we do not do with your balance
A short list, and each item is a deliberate decision.
- We do not lend your balance to anyone.
- We do not stake it, invest it or put it in a yield product.
- We do not use it to fund our operations. Our costs are paid from fees and subscriptions.
- We do not hold it as crypto and hope it goes up.
If we ever offer an interest or yield product, it will be a separate, opt-in feature with its own terms and its own explanation of where the money goes. It will never be the default.
Who does what
Fundly is the layer you interact with: the web app, the card controls, the deposit flow, support. Behind that, at launch, there are three kinds of partner and each one holds a licence for its part.
| Function | Who provides it | What they hold |
|---|---|---|
| Receiving and converting crypto | A registered crypto-asset service provider | Your crypto, briefly, until conversion |
| Currency balance and IBAN | An authorised account partner | Your EUR or USD balance, safeguarded |
| Card issuing | A licensed card issuer on a global network | The card programme and scheme relationship |
We will name each of them on the site, with their licence references, before we take a single deposit. If a partner changes, we will update the page and write a post explaining why.
What happens if Fundly goes away
Companies fail. Here is what that would look like for your money.
Your currency balance is held by the account partner, not by us. If Fundly stopped operating, the partner would still hold your safeguarded funds and would be required to return them to you under its own obligations. Your ability to get money out does not depend on our servers staying up.
Crypto in transit at the moment of a failure is the most exposed stage, which is one reason we keep it short. Deposits confirm and convert in minutes on most chains, and we do not encourage anyone to leave assets parked in stage one.
What happens if a partner goes away
The safeguarding regime covers this case. Segregated customer funds are returned to customers ahead of other creditors. It can take time, and we would be honest about that timeline if it ever happened, but the money is not gone.
We also chose a structure where partners are replaceable. The deposit infrastructure, the account partner and the card issuer are separate relationships, so a problem with one does not mean starting the whole product again.
Things we are still finalising
We said we would include these.
- The exact list of partners and their licence numbers, which depends on contracts still being signed.
- Whether USD balances are available at launch or follow EUR. The IBAN is EUR first.
- The precise wording of the safeguarding disclosure, which goes through legal review before it appears on the site.
When these are settled, this post gets an update note at the top rather than a quiet rewrite.
Why we wrote this before launch
Most companies publish their custody explanation after something goes wrong. We would rather have it in the open while it can still be questioned. If any of the above is unclear, or you think we have described something wrong, email us. We will fix the post, and we will say what we fixed.
If you want a product that is this specific about where your money is, join the waitlist at /join.