DORA: The new regulatory regime for crypto-asset markets

Introduction

In a world where technology is advancing by leaps and bounds, regulation must keep pace to ensure security and transparency in financial markets. The arrival of the new DORA (Digital Operational Resilience Act) regulation promises to revolutionise the cryptoasset arena, establishing a robust regulatory framework that will impact both businesses and investors. In this article, we will break down the most important aspects of DORA and its influence on cryptoasset markets.

What is DORA?

DORA, or the Digital Operational Resilience Regulation, is a European Union legislative initiative aimed at strengthening the digital resilience of financial institutions. This regulation focuses on ensuring that the technological infrastructures used by financial institutions can withstand and recover from any type of disruption, whether due to technical failures, cyber attacks or natural disasters. The main objective of DORA is to create a safer and more reliable environment for digital financial transactions, including those related to cryptoassets.

DORA’s impact on crypto-asset markets

DORA will impose more stringent cybersecurity measures on cryptoasset exchange and custody platforms. This includes the obligation to conduct regular stress tests and adopt advanced risk management practices. Companies that fail to comply with these requirements will face severe penalties.

Similarly, with DORA, cryptoasset transactions should be more transparent and traceable. Platforms will have to implement systems that allow for clear auditing of all transactions, which will help prevent illicit activities such as money laundering and terrorist financing.

On the other hand, consumers of cryptoassets will be better protected under DORA. Companies will have to provide clear and detailed information about the risks associated with investing in cryptoassets, as well as implement effective dispute resolution procedures.

Crypto-asset platforms should demonstrate their ability to maintain uninterrupted operations, even during adverse situations. This implies having robust contingency plans and efficient backup systems.

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The cryptocurrency ecosystem has experienced exponential growth in recent years, attracting investors from around the world.

Benefits and challenges for companies and investors

The implementation of DORA brings with it a number of benefits and challenges for both companies and investors to consider. Among the benefits are increased security and confidence in the cryptoasset market, which could attract more institutional and retail investors. However, complying with the new requirements may pose a significant challenge, especially for startups and small businesses, which could face additional costs and an increased administrative burden.

How to prepare for DORA

To comply with the new DORA regulations, companies must begin to assess and update their current systems and procedures. It is crucial to conduct comprehensive security audits, invest in advanced cybersecurity technology and train staff in risk management. In addition, expert financial regulatory advice is essential to ensure a smooth transition.

At ILP Abogados, we understand the complexity and challenges of adapting to new regulations such as DORA. Our firm offers a specialised legal service in the field of cryptoassets and digital operational resilience. Our lawyers have vast experience and up-to-date knowledge to help your company comply with all legal requirements, minimising risks and ensuring long-term success.

Hiring specialised legal services is not a luxury, but a necessity in such a dynamic and complex regulatory environment. Law is not a commodity; selecting a legal service based on price alone can be costly in the long run. Trust those who can offer in-depth knowledge and proven experience.

At ILP Abogados, we are committed to providing you with the best advice for your company to thrive in the cryptoasset market under the new DORA regulatory framework.

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