Things to think about

Frameworks, tools and lists of common risks all help. But risk management is as much a mindset as a set of tools. It’s about knowing which questions to ask. These questions help you find and describe the risks you face:

• What exactly are you doing? Holding assets for others, owning them yourself, lending, trading or advising each brings different risks.
• What do your legal agreements say? Look at which mistakes or losses you’ve agreed to be responsible for, called liability, and which you haven’t.
• Which teams are involved? Who does each step, and who checks their work?
• Which systems do you rely on? Who runs them, and what happens if one goes down?
• Who else is involved? Every partner, vendor or client you depend on adds steps where something could go wrong.

Your answers will be different from anyone else’s, even for the same product. Two firms can both hold Bitcoin for clients, but if they sign different contracts, use different systems and set up their teams differently, they face different risks. The questions are the same for everyone. The answers, and the risks that come from them, are yours.