Risk score |
Rank |
Impact |
Probability |
5/5 |
2nd |
High |
Medium |
Description:
Operational risk summarizes the uncertainties and hazards a company faces when it attempts to do its day-to-day business activities within a given field or industry. The crypto related services are often offered by startups with lower standards than financial institutions creating various operational risks and fraud. Therefore crypto transfers and custody create some operational risks. This is especially true as blockchain is a new technology with a certain technical complexity. Employees have often a digital assets illiteracy driving them to mistakes. Another risk is the lack of resilience of the system and the services can be unavailable for several hours creating an operational risk. Last but not least, other department such as audit committee need also to be trained to identify and assess risks in a proper manner.
Mitigants:
Some control environment needs to be put in place. For instance, the company could employ additional employees with digital assets experience and use external auditors. Another good practice is to set a new product committee and define the policies/procedures to be followed.