Legislative Risk

Definition ∞ Legislative risk refers to the potential for adverse impacts on digital asset projects, businesses, or market participants due to new laws, regulations, or shifts in governmental policy. This risk arises from the evolving legal landscape surrounding cryptocurrencies, blockchain technology, and decentralized finance. It represents a significant consideration for strategic planning and operational continuity.
Context ∞ Legislative risk remains a primary concern for the digital asset sector, with various jurisdictions proposing and enacting new rules that could fundamentally alter market operations. Debates frequently involve the classification of digital assets, the scope of regulatory authority, and the imposition of reporting requirements. Projects must continually adapt to an unpredictable global policy environment.