What is a segregated client account?
A segregated client account is a bank account in which a licensed provider keeps client money apart from its own operating funds. Your dirhams never become the desk's money: they are held for you, identifiable and returnable. It is a custody arrangement, not insurance and not a guarantee against losses.
KEY FACTS
| Term | Segregated client account |
|---|---|
| Meaning | Client money held apart from the provider's own funds |
| Not the same as | Deposit insurance or a guarantee against losses |
| Required in Dubai | Yes — VARA rulebooks, for licensed providers |
| Meridian OTC licence | VARA VL/24/03/017 |
Source: VARA rulebooks and the VARA public register, as of September 2026.
What a segregated client account is not
A segregated client account is not deposit insurance, not a state guarantee and not protection against losing money in the market. Segregation answers one narrow question: whose money is this while the provider holds it?
Three things it does not do. First, it does not pay out if the provider collapses and client money is already missing — segregation protects identifiable balances, not stolen ones, and VARA's rulebooks provide no compensation fund for clients of a failed provider — the protection rests on the segregation itself. Second, it does not protect value: if the asset you hold falls, the segregated account holds the same asset, faithfully, at the lower price.
Third, segregation is not proof of good behaviour — it is a structural requirement that makes bad behaviour easier to detect. A claim of segregated accounts is only worth anything behind a licence: any Dubai desk should give you its licence number on request, the number resolves in VARA's public register, and ours is linked from the licence section of our main page.
How does account segregation work in the UAE?
In Dubai, segregating client money is a regulatory requirement for licensed providers, not a courtesy. VARA's rulebooks require a licensed virtual-asset service provider to hold client money in accounts separate from its own funds, and client virtual assets in wallets separate from its own holdings, as of September 2026 (Compliance and Risk Management Rulebook, Part IV – Client Money Rules and Part V – Client Virtual Assets Rules).
The mechanics are plain banking. The desk opens a designated client account at a UAE bank, in the desk's name but flagged as holding client funds; money belonging to many clients sits there together, but it never mixes with the account the desk pays its rent and salaries from.
On the asset side, client USDT sits in wallets designated for client holdings, reconciled against the ledger daily. The DIFC and ADGM run their own regimes under the DFSA and FSRA respectively, and the federal SCA sets the baseline outside Dubai; the principle is the same, the rulebooks differ.
Segregation is also why the onboarding paperwork exists: the desk must know whose money is whose before it can hold that money for you. The document list is short, and approval takes one business day in most cases — the details are in our onboarding section.
Why segregation matters when you sell USDT
When you sell USDT at an OTC desk, there is a window — usually a few hours — between sending your USDT and receiving dirhams. During that window the desk holds client value on both legs of the trade, and segregation is what keeps that value legally yours.
The full sequence is in our step-by-step guide to selling USDT in Dubai. The short version: you accept a written quote, send USDT to a wallet designated for client assets, and receive AED from the desk's client account by UAEFTS the same business day.
USD settlements go by SWIFT and take 2 to 5 business days, which makes the window longer and segregation more relevant, not less. A licensed desk pays out only to an account in your own name — that rule is what makes segregation enforceable rather than decorative.
A worked example: selling 250,000 USDT
A worked example, as of September 2026. You sell 250,000 USDT at an all-in spread of 0.12%. The dirham has been pegged to the US dollar at 3.6725 since 1997 — why the USDT/AED rate barely moves is a separate article — so the gross amount is 250,000 × 3.6725 = AED 918,125.
The spread at that size costs AED 1,101.75, so AED 917,023.25 arrives in your own account the same business day. The spread bands by ticket size are published on our pricing section.
Follow the money. At 09:20 you accept the quote; at 09:35 your USDT lands in a client-designated wallet; at 14:10 AED 917,023.25 leaves the segregated client account by UAEFTS. If the desk failed at noon, those balances would still be identifiable as client property — that is the entire point of the structure.
How to check a desk's segregation claims
Four checks take five minutes. The licence number resolves in VARA's public register. The desk names the bank that holds its client account. Payouts go only to accounts in the client's own name. The quote arrives in writing with a defined validity window.
A desk that will not say where client money sits is telling you something; a desk that offers third-party payouts is telling you more. Walk away from both.
FAQ
Is a segregated client account the same as deposit insurance?
No. Deposit insurance is a state scheme that pays out when a bank fails; the UAE has no such scheme covering funds at a virtual-asset desk. Segregation only keeps your money legally separate, so it can be identified and returned.
Does segregation protect me if USDT loses its dollar peg?
No. Segregation protects where your funds sit and whose they are, not what they are worth. A fall in USDT's price is market risk and stays with you, in a segregated account or anywhere else.
Do VARA-licensed desks have to segregate client money?
Yes. VARA's rulebooks require licensed providers to keep client money and client virtual assets separate from their own, as of September 2026. Segregation is a condition of holding the licence, not an optional feature.
Can a licensed desk pay my proceeds to a third-party account?
No. A licensed desk settles only to an account in your own name; offering to pay any account you like is a red flag. Own-name settlement is what makes segregation enforceable in practice.
Sell USDT with segregated client settlement
Meridian OTC is a VARA-licensed Broker-Dealer in Dubai. All-in spread 0.08–0.40% by size, published openly. AED by UAEFTS the same business day, paid only to your own account, once your onboarding is approved.
SOURCES
- VARA rulebooks — client money and client asset requirements, accessed 10 September 2026.
- VARA public register — licence status check, accessed 10 September 2026.
- Central Bank of the UAE — payment systems (UAEFTS), accessed 10 September 2026.
- Meridian OTC licence record and published spread bands, September 2026.
- VARA Compliance and Risk Management Rulebook (19 May 2025) — Part IV Client Money Rules — Rule IV.B.2 (Client Money held in a Client Account, outside the VASP's estate) and IV.B.9.b (no VASP money in a Client Account), accessed 14 September 2026.
- VARA Compliance and Risk Management Rulebook — Part V Client Virtual Assets Rules — Client VAs held on a one-to-one basis, accessed 14 September 2026.
This guide is informational and is not legal, tax or investment advice, nor an invitation to buy or sell any virtual asset. Rules and figures are as of September 2026 — re-check the sources before acting. Virtual assets may lose their value in full or in part and are subject to extreme volatility.