Investor compensation scheme

Compensation schemes are statutory backstops attached to an investment licence, not insurance policies on price. Bitstamp's Slovenian brokerage, incorporated on 28 October 2024, is inside Slovenia's scheme under Article 450 of the ZTFI-1, which covers retail claims but excludes professional counterparties and medium or large companies. Spot bitcoin sits outside those schemes almost everywhere, so nothing repays you if the exchange holding your coins collapses.

How it works

An investor compensation scheme is written into the law that licenses investment firms, and it triggers on the failure of the firm, never on the failure of an investment. A perpetual future moving against you is the outcome the licence assumes; the licensed firm going under while holding your cash is the outcome the scheme is for.

Bitstamp Financial Services, brokerage company, Ltd. publishes the clause in full. The company is registered in Ljubljana with share capital of EUR 3,450,000 and was established on 28 October 2024. Its General Terms and Conditions, dated 1 July 2026, run under Slovenia's Market in Financial Instruments Act (Official Gazette No. 77/18, the ZTFI-1) and under MiFID II, Directive 2014/65/EU. Section 3.4 states that "in accordance with the provisions of Article 450 of the ZTFI-1, the Company is included in the Investor Compensation Scheme".

The limits sit in the same section, and they are typical rather than peculiar to Slovenia. Cover reaches "claims of retail counterparties" only. It does not reach professional counterparties under Articles 246 to 248 of the ZTFI-1, claims where the holder has been convicted of money laundering, or claims by legal persons that count as large or medium-sized companies under the Slovenian Companies Act, with further exclusions listed in Article 450(8). Being a client of a covered firm is not the same as being a covered client.

Scope is fixed by what the firm is licensed to sell. This company provides investment services "only in relation options, futures and perpetual futures". Spot bitcoin is not on that list, so buying a coin outright buys nothing from the scheme even at the same brand.

The scheme is a residual, not the first thing standing between you and a loss. The same terms record that client financial instruments "do not constitute assets of the Company and do not form part of the Company's assets in the event of the Company's bankruptcy". Segregation is supposed to return your holdings intact; the scheme exists for the shortfall when it does not. Clients must also confirm they have read a standing document called "Information on the investor compensation scheme", which the terms say holds the fuller detail.

Why this matters when you buy bitcoin

An investor compensation scheme almost never covers the bitcoin you buy, which is why a licence badge on an exchange page should not be read as a promise that somebody will make you whole. Not one of the 63 exchange records on this site carries a compensation scheme covering spot bitcoin, and a long licence list makes no difference to that.

Bitstamp is the sharpest case. Its dated licence history is long: a Luxembourg payment institution licence in April 2016, a New York BitLicense in April 2019, an FCA cryptoasset registration in June 2023, a Luxembourg CSSF authorisation under MiCA on 16 May 2025 and a Singapore major payment institution licence on 3 July 2025. Not one of those pulls a spot bitcoin balance into a compensation scheme. The 32 crypto-licence guides show the same gap from the regulator's side: Slovenia's guide names the ATVP as the authority that authorises crypto-asset service providers, and that regime carries authorisation and supervision but no payout fund.

Look at what happened rather than at the badges. The site's Bitstamp record shows that on 4 January 2015 the exchange lost 18,866 BTC from its hot wallet, worth 5.26 million dollars at the time, and repaid customers in full. That money came out of the company's own pocket because it could afford it and chose to. Had it failed instead, no scheme would have covered the shortfall, and across the 231 country guides the picture is the same wherever you buy.

Two things follow. Check which legal entity your account sits with, because your country of residence decides that and the answer changes the law that applies. And treat the 41 wallet reviews as the real alternative: coins in a wallet you control take the question of who compensates you off the table.

Bitstamp is inside one scheme and outside four others

Bitstamp publishes a separate compensation answer in each entity's own terms, and these five do not agree. The variable is the entity and the instrument, not the brand on the login screen.

The Slovenian brokerage is in. Its terms say the company is included in the Investor Compensation Scheme under Article 450 of the ZTFI-1, and it sells options, futures and perpetual futures.

The Luxembourg entity, Bitstamp Europe S.A., is out and says so directly: "Crypto-Assets do not qualify as deposit or an investment under Luxembourg law, hence you will have no recourse to the Luxembourg deposit guarantee or investor indemnity schemes administered by the Conseil des Protection des Deposants et des Investisseurs or any equivalent scheme in the EEA."

Bitstamp Limited, incorporated in England and Wales with company number 8157033, is out in terms last updated on May 30, 2025. Crypto-asset activity in the UK falls outside the scope of both the Financial Ombudsman Services and the Financial Services Compensation Scheme, so "your Account is not protected by the FSCS, and you will have no recourse to the FOS in the event of a complaint relating to Services".

Bitstamp Global Ltd, the British Virgin Islands entity, states that your fiat currency "will not be protected by the BVI Financial Services Compensation Scheme or other applicable compensation or deposit guarantee schemes" if you lose money through its insolvency or default.

The Singapore terms are the subtle one. They name the Singapore Deposit Insurance Corporation Limited, but only as a scheme you might claim against if one of Bitstamp's banking providers becomes insolvent. That is cover for a bank failing, not for Bitstamp failing, and the two are constantly conflated.

Investor compensation scheme vs Safeguarding of client assets

An investor compensation scheme pays out after protection has already broken; safeguarding of client assets is the protection. Safeguarding is a continuous obligation to keep client money and client holdings apart from the firm's own, tested every day the firm operates. Compensation is a single payment event, after a failure, and only for eligible claimants.

The Slovenian terms carry both. Client financial instruments are declared outside the company's bankruptcy estate, and separately the company is declared inside the scheme. Segregation is meant to make the scheme unnecessary; the scheme is there for the day it has a hole in it.

Crypto is where the pair comes apart. MiCA gives spot crypto-assets a safeguarding obligation and no compensation scheme at all, so you get the ring-fence with nothing behind it.

Investor compensation scheme vs Client money trust

An investor compensation scheme is created by statute and sits outside the contract you signed; a client money trust is built inside that contract by the firm itself. Bitstamp's UK terms hold customer fiat on trust and then say plainly that the trust buys no scheme protection: "Your fiat currency will not be protected by the UK Financial Services Compensation Scheme or other applicable compensation or deposit guarantee schemes in the event that you suffer losses arising from our insolvency or default."

The Trust Appendix works the arithmetic. A GBP Currency Trust holds GBP 1,000, of which GBP 100 is yours. A banking provider fails and GBP 100 vanishes, leaving GBP 900. Your one tenth entitlement is now GBP 90, and the missing GBP 10 is something you "may" be able to claim under a deposit guarantee or compensation scheme covering that particular bank, depending on your circumstances.

A trust upgrades your position from unsecured creditor to beneficiary, which matters when a firm collapses. It does not top you up. Only a compensation scheme does that.