License Revocation Risk

Definition ∞ License revocation risk refers to the potential for a regulatory authority to withdraw a business’s operating permit due to non-compliance with legal or operational requirements. For digital asset service providers, this risk arises from failing to meet anti-money laundering standards, consumer protection mandates, or other specific industry regulations. It represents a significant threat to a firm’s ability to conduct business in a given jurisdiction.
Context ∞ License revocation risk is a critical consideration for digital asset firms operating in increasingly regulated environments. Regulators are demonstrating a willingness to enforce compliance strictly, leading to increased scrutiny of operational practices and internal controls. Maintaining robust compliance programs and adapting swiftly to evolving legal frameworks are essential for mitigating this substantial business risk.