Risk score |
Rank |
Impact |
Probability |
3/5 |
4th |
Medium |
High |
Description:
Reputational risk corresponds to a threat or danger to standing of a business/entity or to its name. There are different type of tokens with some tokens being anonymous or missing proper due diligence and represent a reputational risk. The adoption of crypto-assets is still in its infancy and hold a bad reputation due to former money laundering activities and excessive electric consumption making them a none eco-friendly investment.
While regulations across the world are in the making, they are still unclear. Crypto-assets are considered most of the time as part of none financial risks and hold a reputational risk when using them as treasury tools for the above mentioned elements.
Mitigants:
The companies should assess the impact to its current reputation relatively to the rest of its activity. It is also necessary to maintain a good investor relationship and transparency with crypto-assets. A company could limit itself to best known token such as Bitcoin or Ether.