Definition ∞ Operational risk management involves identifying, assessing, and mitigating risks that arise from a company’s day-to-day business activities. This discipline systematically addresses potential losses resulting from inadequate or failed internal processes, people, and systems, or from external events. In the digital asset sector, it includes managing risks related to cybersecurity, smart contract vulnerabilities, technological failures, human error, and compliance breaches. Robust operational risk management frameworks are crucial for maintaining business continuity and protecting digital assets.
Context ∞ Operational risk management is a paramount concern for firms operating within the digital asset ecosystem due to the nascent nature of the technology and the rapid pace of innovation. The discussion often revolves around developing adaptable frameworks that account for the unique security challenges of blockchain and decentralized finance. Future efforts focus on integrating advanced analytics and automated monitoring tools to enhance risk detection and response capabilities.
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