Due Diligence Mandate

Definition ∞ Due Diligence Mandate is a formal requirement for an organization to conduct thorough investigation and analysis before entering a transaction or agreement. It imposes an obligation to assess potential risks, liabilities, and opportunities associated with a particular action. This mandate ensures informed decision-making and adherence to legal or ethical standards. It is a critical component of risk management.
Context ∞ In the cryptocurrency sector, due diligence mandates are becoming increasingly important for investors, exchanges, and regulatory bodies. News often covers calls for stricter due diligence in decentralized finance projects or before listing new digital assets, aiming to protect consumers and prevent fraud. The discussion centers on adapting traditional due diligence practices to the unique characteristics of blockchain and digital assets.