Definition ∞ Operational risk transfer is the practice of shifting potential losses from operational failures to a third party, typically through insurance or contractual agreements. This involves identifying specific operational risks, such as cybersecurity breaches, system outages, or human error, and arranging for another entity to bear the financial consequences. In digital asset operations, this can involve insurance policies for crypto custodians or smart contract audit services that mitigate technical vulnerabilities. It helps protect businesses from unforeseen disruptions.
Context ∞ Managing and transferring operational risk is a growing concern for digital asset businesses as the industry matures. News reports often highlight the availability of specialized insurance products for crypto firms and the increasing demand for robust risk management solutions. The ability to effectively transfer operational risk is crucial for attracting institutional participation and ensuring the long-term viability of digital asset services.
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