Your funds are held at Interactive Brokers (Nasdaq: IBKR) — a broker operating since 1978, publicly listed on Nasdaq, with over $20 billion in equity capital, regulated by the SEC, FINRA, and CFTC.

Prediction market contracts are CFTC-regulated futures products. Under CFTC rules, all customer funds must be kept separate from the broker's own funds at all times. These segregated funds have a bankruptcy preference — in the event of insolvency, customer funds are returned to customers before creditors.

IBKR performs a detailed reconciliation of client funds on a daily basis to ensure proper segregation, and submits that computation to regulators daily; the industry standard is to do it weekly. Your funds are identifiable and ring-fenced at all times, not just at the end of the week.

Although permitted by CFTC regulations, IBKR does not currently invest any client money in money market funds. A majority of client funds is invested in short-term U.S. Treasury securities. These statements come from IBKR's own published financial-strength disclosures.

One thing segregation is not: insurance. It's a legal protection that keeps your funds separate and identifiable — but these are brokerage accounts, not bank deposits, and they are not FDIC insured.