Firm Responsibility Model

Definition ∞ A firm responsibility model is a framework outlining the specific duties, obligations, and accountability structures for entities operating within the digital asset ecosystem. This model defines who is answerable for various aspects of a crypto business, such as asset custody, transaction execution, or regulatory compliance. It helps clarify roles and responsibilities in a complex and often decentralized environment. This framework is crucial for establishing clear lines of accountability and managing operational risk.
Context ∞ The absence of clear firm responsibility models has been a significant challenge in the digital asset sector, particularly during market downturns or platform failures. Regulators are increasingly pushing for clearer definitions of accountability among crypto businesses to protect consumers and ensure market integrity. Debates often center on how traditional financial responsibility models apply to decentralized autonomous organizations (DAOs) or other novel blockchain structures.