Definition ∞ Risk-based oversight is a regulatory or management approach that prioritizes resources and attention based on the level of risk associated with specific activities, entities, or systems. It allocates more scrutiny to areas presenting higher potential for harm or non-compliance. This method aims for efficient and targeted supervision.
Context ∞ In the evolving regulatory landscape for digital assets, risk-based oversight is becoming a preferred strategy for authorities. Instead of a one-size-fits-all approach, regulators are assessing crypto businesses based on their specific risk profiles, such as asset type, transaction volume, and client base. This tailored supervision seeks to balance innovation with necessary safeguards in the digital economy.
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