Fund Mismanagement

Definition ∞ Fund mismanagement occurs when an entity responsible for managing financial assets handles them improperly, often leading to losses for investors or beneficiaries. This can involve reckless investment strategies, unauthorized use of funds, or inadequate risk controls. Such actions represent a breach of fiduciary duty.
Context ∞ Reports of fund mismanagement are unfortunately common in crypto news, particularly involving centralized exchanges, DeFi protocols, or investment platforms. These incidents often result in significant financial losses for users and erode trust in the broader digital asset space. Regulatory bodies are increasingly focused on implementing stricter oversight and transparency requirements to mitigate the risks of fund mismanagement within the crypto industry.