DORA addresses a gap in financial regulation: while existing rules covered risks like credit and market volatility, they didn't adequately address technology failures, cyberattacks, or system outages. DORA consolidates scattered Information and Communication Technology (ICT) requirements into a single regulatory framework.
DORA casts a wide net across the financial sector, applying to over twenty different types of financial entities throughout the EU. This includes traditional institutions like banks, insurance companies, and investment firms, but it also extends significantly into newer financial technology sectors like payment services, e-money institutions, and digital asset platforms.
For the crypto industry specifically, the regulation directly affects all CASPs operating in or serving the European market. This includes exchanges, wallet providers, custody services, and trading platforms. It also extends to their technology suppliers. ICT third-party service providers like cloud hosting companies or specialised crypto infrastructure providers may be subject to DORA requirements, particularly if they're designated as critical to the first party’s operations.
DORA has three main objectives that are particularly relevant for crypto companies:
Understanding DORA requires understanding how it works alongside the Markets in Crypto-Assets Regulation (MiCA) and the Transfer of Funds Regulation (TFR). These three regulatory frameworks work in harmony but address different aspects of crypto operations:
MiCA governs how crypto assets are issued, marketed, and traded. It represents the fundamental regulatory framework for crypto businesses. TFR focuses on transaction monitoring and anti-money laundering compliance, requiring firms to collect and share customer information for transfers.
DORA complements these by focusing specifically on operational resilience. It ensures that the technology and systems supporting these regulated activities remain secure and available. For crypto firms, this means having robust ICT risk management that supports compliance with both MiCA and TFR.
DORA's requirements are structured around five core pillars.
ICT risk management requires firms to establish internal governance frameworks for identifying, assessing, and managing technology risks. This includes having clear responsibilities at board level and implementing risk management processes that are reviewed at least once a year.
Incident reporting mandates that major ICT-related incidents should be reported to national competent authorities. Firms must have processes to classify incidents, communicate with regulators and clients, and maintain detailed records of security events.
Digital operational resilience includes some of DORA's most demanding requirements. Under Articles 25, 26, and 27, organisations must conduct quarterly vulnerability assessments, annual penetration testing, and comprehensive threat-led penetration testing (TLPT) every three years. This testing extends beyond internal systems to include critical third-party providers.
Third-party risk needs to be managed throughout the entire lifecycle of vendor relationships. This covers pre-engagement due diligence, ongoing monitoring during the relationship, and proper termination and exit strategies. DORA pays particular attention to concentration risk, where firms rely heavily on a single provider.
Finally, information sharing arrangements encourage firms to exchange cyberthreat intelligence to improve collective resilience across the financial industry. The idea is to create a warning network where crypto companies can learn about new attack methods, malicious wallet addresses, or emerging vulnerabilities before they become targets themselves. For smaller crypto companies that lack extensive security teams, this shared intelligence provides access to threat data they couldn't gather independently.
DORA compliance is important because the framework carries substantial penalties for companies that fail to meet its requirements. They can face fines of up to 2% of total annual worldwide turnover or 1% of average daily turnover. Critical ICT third-party service providers face potential fines of up to €5 million.
Beyond the fines themselves, non-compliance can damage firm reputation, limit business opportunities, and potentially result in the suspension of operating licences.
DORA creates both challenges and opportunities for crypto firms. Its main challenges are practical: crypto companies must hire cybersecurity specialists, implement new monitoring systems, and conduct regular penetration testing. The ongoing reporting requirements also ask for dedicated compliance resources.
The opportunities are equally specific: instead of navigating different cybersecurity rules in each EU country, crypto firms now follow one standard across all 27 member states. This makes expansion simpler and cheaper.
DORA also helps crypto companies build credibility. A company that is compliant with DORA operates to the same security standards as major banks. This reassures institutional clients, investors, and partners who might otherwise view crypto companies as too risky to work with.
Looking ahead, DORA represents only the beginning of better operational resilience requirements. Institutions must continue reviewing, testing, and improving their capabilities as threats evolve and technology advances.
The regulation also strengthens the financial sector's collective defence against growing digital threats, creating a more resilient foundation for the broader economy. This is particularly important as crypto services become increasingly integrated with traditional financial infrastructure.
DORA is also expected to influence regulatory approaches in other jurisdictions. As the EU sets new standards for digital operational resilience, other regions may adopt similar frameworks, potentially creating global consistency in cybersecurity requirements.
DORA is reshaping how crypto companies approach operational resilience. Rather than viewing it as a compliance burden, forward-thinking companies recognise that robust operational resilience creates competitive advantages through reduced cybersecurity risk, more trust from their clients and partners, and better operational efficiency.
The regulation brings clarity to an industry that has long operated with limited regulatory guidance. It is a framework for building sustainable, institutional-grade crypto businesses. By embracing DORA's requirements, crypto companies position themselves for long-term success in an increasingly regulated but also increasingly trusted digital asset ecosystem.
For crypto companies eager to thrive under DORA's requirements, partnering with an experienced digital asset protection provider like CoinCover can significantly streamline your compliance efforts. Speak to CoinCover today to understand how you can successfully navigate DORA’s requirements.