[matthewheath]

> It's also not clear under what law their customer funds are not treated as company assets, in which case if they're bankrupt, the creditors get first dibs.

Insolvency events are covered by section 24 of Part 3 of the Electronic Money Regulations 2011.

"24. (1) Subject to paragraph (2), where there is an insolvency event—

(a) the claims of electronic money holders are to be paid from the asset pool in priority to all other creditors; and

(b) until all the claims of electronic money holders have been paid, no right of set-off or security right may be exercised in respect of the asset pool except to the extent that the right of set-off relates to fees and expenses in relation to operating an account held in accordance with regulation 21(2)(a) or (b) or 22(1)(b).

(2) The claims referred to in paragraph (1)(a) shall not be subject to the priority of expenses of an insolvency proceeding except in respect of the costs of distributing the asset pool."

So, these funds would be kept secure from other creditors and paid out as a priority.

https://www.legislation.gov.uk/uksi/2011/99/part/3/crosshead...