Operational risk mitigation involves implementing strategies and controls to reduce the likelihood and impact of losses resulting from inadequate or failed internal processes, people, systems, or external events. In digital asset operations, this includes safeguarding against cyberattacks, human error, and system malfunctions. It is essential for maintaining service reliability and asset security.
Context
The situation surrounding operational risk mitigation in the cryptocurrency industry is particularly important due to the novel technical and security challenges of blockchain. A key debate involves establishing best practices for smart contract audits, cold storage solutions, and robust disaster recovery plans. Future developments focus on advanced security protocols and standardized risk management frameworks.
Firms managing client digital assets must now integrate comprehensive AFSL compliance frameworks, fundamentally altering operational risk and capital requirements.
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