Financial Harm

Definition ∞ Financial Harm refers to any monetary loss or detriment experienced by individuals or entities due to fraudulent activities, market manipulation, or operational failures within the digital asset space. This can include losses from scams, hacks, price crashes, or mismanagement of funds. Such adverse outcomes often result from a lack of regulation, inadequate security measures, or deceptive practices. Protecting against this loss is a primary concern for regulators and investors.
Context ∞ Reports of financial harm are unfortunately common in crypto news, frequently accompanying stories of exchange hacks, rug pulls, or investment schemes. These incidents highlight the inherent risks associated with unregulated or nascent digital asset markets. Regulatory bodies often cite the prevention of financial harm as a key driver for increased oversight. Understanding the sources of financial harm is crucial for both investors and policymakers seeking to improve market safety.