Asset Manager Risk

Definition ∞ Asset Manager Risk is the potential for financial loss or operational failure stemming from the management of digital assets by a third-party entity. It includes dangers related to investment decisions, operational security, regulatory compliance, and the custodian’s solvency. Effective risk oversight is crucial for protecting client capital and maintaining trust in digital asset management services.
Context ∞ The discussion surrounding asset manager risk in crypto frequently centers on regulatory clarity and the implementation of robust institutional-grade security and compliance frameworks. Ongoing efforts aim to standardize best practices for digital asset custodianship and portfolio management, addressing concerns about market volatility and evolving legal landscapes.