What Are Escrow Funds?

According to the current development model of Internet finance, all formal P2P financial institutions on the market use the form of fund custody, because this can avoid touching the fund pool and thus avoid touching the legal red line.

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(Funds custody)

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According to the current development model of Internet finance, all formal P2P financial institutions on the market use the form of fund custody, because this can avoid touching the fund pool and thus avoid touching the legal red line.

Fund custody in Internet finance ^[1] refers to the flow of funds running in a third-party fund custody company without going through a platform account. This avoids the risk that the platform maliciously misappropriates transaction funds to investors. Fund escrow is generally a cooperation between P2P platforms and third-party payment companies. The true fund escrow model is to allow investors and borrowers to open accounts in the system of third-party payment platforms. If the investor's account is directly transferred to the borrower's account, it will not pass through the platform.