Regulatory Risk Architecture

Definition ∞ Regulatory Risk Architecture is the structured framework of policies, procedures, and systems an organization employs to identify, assess, mitigate, and monitor compliance with relevant legal and regulatory obligations. This architecture is designed to manage exposure to regulatory penalties and operational disruptions. It ensures adherence to legal requirements across jurisdictions. This framework is vital for operational continuity.
Context ∞ In the digital asset sector, developing a robust regulatory risk architecture is crucial for businesses navigating evolving compliance landscapes related to anti-money laundering and know-your-customer requirements. News often highlights the challenges and importance of this framework for institutional adoption and market legitimacy. Effective architecture reduces legal exposure.