As crypto exchanges, DeFi platforms, wallet providers, and financial applications grow, so do risks like cyberattacks, smart contract vulnerabilities, and third-party service failures.
For financial entities, including crypto businesses operating in or targeting the EU, the Digital Operational Resilience Act (DORA) is the key regulation that demands urgent attention.
These businesses need to follow DORA and implement rigorous operational practices that include ICT (information and communication technology) risk management, incident reporting, resilience testing and third-party risk management.
DORA compliance is not optional. Non-adherence can lead to severe penalties, operational shutdowns, or lost access to the EU’s market—a key hub for crypto innovation.
In this article, we will tell you all you need to know about DORA compliance, break down actionable steps to help you align your operations and prepare your business to avoid disruptions.
What is the Digital Operational Resilience Act (DORA)?
Before DORA, the European Union didn't have a unified document that would regulate cybersecurity in the financial sector. It led to a fragmented approach, where individual countries had varying standards, and cybersecurity rules were dispersed across multiple regulations.
It caused compliance challenges and increased risks.
In response, the European Commission identified these gaps and introduced the first draft of DORA in 2020. After review, DORA was formally adopted in 2022 and entered into force on January 16, 2023. The deadline for compliance was set for January 17, 2025.
Businesses and European legislators had two years to prepare for the implementation of DORA, which is now fully in effect.
The main difference between DORA and previous EU financial regulations like Basel III and CRD IV is that DORA specifically centralizes cybersecurity, ICT risk management, and digital resilience.
It is the first document that focuses on modern technology-related issues, providing a unified framework for managing digital operational risks in the financial sector.
What types of businesses need DORA compliance
Let's take a look at the EU financial organizations that DORA affects.
Financial institutions directly under DORA's scope
The Digital Operational Resilience Act in Article 2 lists:
- Credit institutions such as banks
- Credit rating agencies
- European insurance companies and investment firms
- Payment institutions
- Trading platforms
- Data reporting service providers
- Investment fund management
- Crowdfunding service providers
DORA also includes Crypto Asset Service Providers (CASPs), issuers of asset-referenced tokens (like stablecoins), centralized crypto exchanges, custodial and noncustodial wallets, and crypto lending/borrowing platforms.
These crypto companies act under MiCA regulation, which sets rules for what crypto businesses can do. DORA regulates how they do it—ensuring their tech, processes, and partners are resilient to digital risks.
You can't operate in the EU unless you prove your systems are secure, reliable, and ready to handle disruptions.
Critical ICT third-party service providers (CTPPs)
DORA doesn't just regulate financial institutions—it also targets the tech vendors they rely on, like cloud providers, data centers, or cybersecurity firms.
These are called Critical ICT Third-Party Providers (CTPPs), and DORA gives EU regulators the power to supervise them directly.
Under DORA (Article 31), the European Supervisory Authorities (ESAs) use three criteria to decide if a tech provider is "critical":
- Impact on financial stability: Does a disruption of this provider's services threaten the EU's financial system?
- Scale of reliance: How many financial institutions depend on this provider?
- Substitutability: Are there few or no alternatives to this provider?
If a provider meets these criteria, it's labeled a CTPP and faces stricter supervision.
Crypto companies (like exchanges or wallet providers) often rely on third-party services, such as:
- Cloud hosting for trading platforms
- Blockchain node providers
- KYC/AML verification tools
- Smart contract auditing firms
Under DORA, if these vendors are deemed "critical," crypto businesses must:
- Ensure contracts with CTPPs meet DORA's security standards
- Prepare contingency plans in case the CTPP fails or gets hacked
- Report incidents involving the CTPP to regulators within strict deadlines
If your business relies on external providers for IT services, you're now responsible for their risks.
Non-EU businesses serving EU financial institutions
Like the GDPR, DORA has extraterritorial reach, meaning it can apply to companies outside the EU. If your business provides critical ICT services to EU-based financial institutions—even if you're headquartered in the U.S., Asia, or elsewhere—you must comply with DORA.
DORA’s global scope means location doesn’t matter—impact does. Crypto and fintech businesses must vet all third-party providers, regardless of where they’re based, to ensure DORA compliance.
Non-EU providers serving the EU market have no choice but to align with DORA’s framework—or risk losing access to one of the world’s largest financial ecosystems.
Compliance considerations for crypto businesses
Image source: Freepik
DORA applies to crypto asset service providers’ operations. It mandates strict cybersecurity standards to protect users against cyber threats.
You need to implement measures to mitigate ICT risks, report incidents, conduct regular testing, and establish standards for third-party service providers.
DORA's impact on crypto exchanges and services
DORA increases cybersecurity requirements for crypto exchanges and services by requiring security testing and risk assessments, including penetration testing and incident reporting.
It also mandates monitoring of third-party providers, especially those affecting critical ICT systems.
DORA and MiCA correlation
MiCA is the primary EU regulation governing crypto business operations, focusing on licensing and compliance standards for crypto companies operating in the EU.
While MiCA addresses basic cyber threats and security, DORA takes these standards higher by stressing high cybersecurity and risk management. It covers third-party service providers and expands the security conditions for crypto firms.
You must comply with both to save your license and avoid fines.
DeFi platforms and decentralized services
DeFi platforms on decentralized networks are not subject to regulations like DORA. The lack of a central authority and a single point of contact makes it harder to implement strict security regulations.
DORA has recently become effective, but its global impact on DeFi is still uncertain. It is best to consult legal experts like Legal Nodes to determine how your crypto startup can comply with these regulations.
Stablecoin issuers and digital asset custody services
DORA is not specifically a stablecoin regulation but applies to crypto asset service providers and issuers of asset-referenced tokens.
Stablecoin issuers and digital custody services must implement the high-security standards and risk management mentioned in DORA.
NFT marketplaces and new crypto business models
NFT marketplaces and new crypto business models fall under crypto asset service providers and issuers of asset-referenced tokens under DORA.
This means that they must adhere to the same cybersecurity standards outlined in DORA.
The five pillars of DORA compliance
Image source: Freepik
Let's break down the five key areas that fall under DORA regulation.
ICT risk management framework
Risk management is the core of DORA. Financial organizations need a clear framework to keep an eye on and cut down cyber threats and ICT risks.
To stay safe, specify and write down ICT risks, map all critical system dependencies, and perform regular updates.
Clear recovery time objectives and ownership assignments minimize data loss and downtime during crises. Staff training will be required to meet DORA compliance.
ICT incident reporting
You will need to report any incidents to the authorities within four hours of detection. For major incidents, a more detailed report is required within 72 hours, and a final report up to one month later.
DORA defines major incidents as having a "high adverse impact on the network and information systems that support critical or important functions of the financial entity."
The specific authority to report to depends on the EU country where your crypto business is licensed. For some businesses, the European Securities and Markets Authority or the European Banking Authority may be the central supervisory authority.
Digital operational resilience testing
Chapter IV is about digital operations resilience testing and lists the testing procedures.
You must perform threat-led penetration testing (TLPT) every three years. Authorities can require more frequent testing based on risk assessment. Given past security issues in crypto, more frequent testing is likely.
Testing should align with the TIBER-EU framework, which uses ethical threat intelligence.
You must test all critical ICT systems, including third-party providers. You will also need to identify key business processes and IT systems that support them and test them regularly.
ICT third-party risk management
DORA also applies to third-party service providers, meaning financial entities must ensure their partners meet the same standards.
It includes vendor assessment, due diligence, and contractual clauses guaranteeing that DORA standards are met.
With your partners, you must maintain appropriate ICT risk management, mitigation methods, and contingency plans to prevent system disruptions during major ICT-related incidents.
Information sharing
DORA Chapter VI regulates information-sharing arrangements between financial entities.
It encourages industry collaboration and the sharing of threat information, tactics and measures to mitigate risks.
The goal is to improve cybersecurity by promoting transparency with authorities and other entities, enabling a stronger collective defense against threats.
Key DORA compliance deadlines
Financial entities must submit Registers of Information about their contracts with third-party service providers by July 2025.
The European Supervisory Authorities (ESAs) have outlined a roadmap for overseeing third-party service providers, worth reviewing.
Since ESAs have already started preparing tools for monitoring compliance, it won't take long for them to begin issuing fines.
Crypto firms relying on decentralized third parties (e.g., public blockchain validators) face ambiguities in compliance.
Fines for DORA non-compliance
Image source: Freepik
Fines drive DORA compliance. Here's what you can expect from this regulation.
Financial penalties
DORA has high administrative penalties that can go up to 1% of the total annual worldwide turnover or 1% of the average daily worldwide turnover for ongoing breaches. For financial entities, these fines can amount to millions of euros.
DORA also includes fines for third-party service providers and individuals, with senior management fines reaching up to €1 million for negligence, likely encouraging stricter compliance.
Operational restrictions
DORA also mentions operational restrictions, service suspension and revoked authorization to operate in the EU.
MiCA, crucial for crypto firms, requires maintaining security and risk management standards to retain a VASP (Virtual Asset Service Provider) license.
It is linked to DORA's requirements, meaning compliance with both regulations is necessary to avoid penalties and maintain operational licenses.
Reputation damage
Misaligning with DORA can really hurt your company's reputation since it shows you're not meeting important security standards. If there's a breach, things get worse—sensitive user data could end up being compromised.
Crypto firms also face higher scrutiny due to the sector's perceived risk. Non-compliance could deter institutional partners (e.g., banks and asset managers).
That's why complying with DORA is key to avoid penalties, protect your users, and maintain a strong standing.
DORA compliance challenges for crypto businesses
Crypto businesses can be centralized and decentralized, but decentralized DeFi platforms will face more problems with DORA compliance. That's because it's harder to maintain strict cybersecurity standards when you don't control all the transactions on your platform.
Take smart contracts as an example—enforcing preventive measures and reporting incidents isn't always possible because they execute automatically. The same goes for other types of DeFi.
DORA legislators will face this ongoing challenge, and crypto companies must adapt on the fly.
Balancing innovation with regulatory requirements
DORA affects blockchain companies and traditional financial institutions; getting too caught up in compliance can disrupt progress.
Since regulations are too strict, they can slow innovation, but not following the rules can lead to hefty fines.
It creates a real need to strike a balance between meeting these regulatory demands and keeping the business moving forward.
Cross-border considerations
DORA impacts third-party vendors, even if they're not in the EU. You really need to be cautious when you're signing contracts and picking partners. It’s important to make sure they can meet DORA's standards.
Integration with existing cybersecurity frameworks
DORA is a significant development in cybersecurity, but it's not the only advancement happening in that space. Let's mention a few:
- NIS2 Directive: Similar to DORA in terms of risk management and incident reporting, it has its specific standards.
- ISO 27001: A long-standing benchmark for information security management.
- Basel III and TIBER-EU: These are still active and relevant, with DORA building upon some of their principles.
How to prepare for DORA compliance: A step-by-step approach
DORA is in effect, and the best way to approach compliance is to meet its standards before entering the EU market. Here’s a checklist.
Conduct a gap assessment
If you are already running a crypto business, the first step is to assess your current ICT infrastructure and compare it to DORA standards.
Focus on your risk management frameworks and figure out what you need to fix or implement first.
Create a DORA compliance roadmap
Breaking things down into stages is a smart move, especially when you need to give vendors and partners some time to get up to speed with new standards.
You'll probably need to train personnel or make new hires which will also take time. Plan your resources from the start and involve the key staff who will be handling the implementation.
Implement incident response and reporting mechanisms
DORA has solid reporting standards, so you'll need to set up workflows for reporting and pick the right people to keep an eye on key activities.
Establish third-party risk management
Third-party compliance will be the most challenging part of DORA implementation.
First, you should go through all your contracts and check if your vendors actually meet the requirements. You might even need to look for new vendors if they don't stack up.
But you also need to set up ways to keep an eye on ongoing compliance, since your vendors need to stay in line with DORA standards for as long as you have contracts with them.
Build and test resilience capabilities
DORA requires test and resilience procedures and has high non-compliance fines.
To stay on the right side of things, create a plan for penetration testing and run regular drills to prepare for worst-case scenarios and outages.
How Legal Nodes helps with DORA compliance
Legal Nodes makes DORA compliance easier by providing full, ongoing legal support for crypto companies.
Based on our extensive experience, we will guide you in choosing the best jurisdiction that supports crypto innovation while ensuring compliance with DORA and other regulations like MiCA.
Our partner network includes over 20 countries, offering diverse legal expertise to help you with DORA compliance and your company’s expansion into new markets. We cooperate with boutique law firms and independent legal experts who used to work at large legal companies.
Whether you are a centralized (CEX) or decentralized (DEX) exchange, with our Virtual Legal Officer, you have a dedicated legal expert to answer questions, interpret new legislation and help you adapt your internal processes as the regulation develops.
Our team will keep you updated on changes in the legal landscape so your systems and policies are aligned with DORA digital operational resilience requirements.
Following our guidelines, you can maintain your crypto business while complying with local and international standards.
Legal Nodes provides a full spectrum of legal and regulatory support—from initial compliance setup and licensing to marketing compliance and ongoing advisory services—ensuring your crypto business is well-prepared to grow in vibrant regulatory circumstances.
Conclusion about DORA compliance
DORA is more than a regulatory requirement – it’s a strategic necessity to protect modern digital infrastructure.
By following DORA standards to the letter, organizations build frameworks that mitigate operational risk, protect sensitive data and adapt to emerging threats.
Security is reinforced by incorporating these harsh measures, and stakeholders are given the confidence to innovate.
DORA compliance gives companies a competitive advantage, operational resilience and a reputation as a forward-thinking, reliable organization in a complex regulatory environment.
Get started with Legal Nodes today, and we will assess your current situation and tell you the best course of action for DORA implementation.
FAQs about DORA compliance
What is DORA compliant?
To be DORA compliant means following the strict ICT risk management standards set by the EU Digital Operational Resilience Act. Read our article to find out how to check if your crypto business is DORA compliant.
What is the DORA standard?
The Digital Operational Resilience Act (DORA) is a regulation by the European Union that sets cybersecurity, ICT risk management, testing, cyber resilience, reporting, and similar standards for financial entities on the EU’s territory.
It sets strict standards that all financial companies, including ICT third-party service providers, must meet.
What is the DORA regulation system?
The Digital Operational Resilience Act, or DORA regulation, is a cybersecurity standard system for financial institutions and their partners that want to operate in EU markets.
What is the main purpose of DORA?
The main purpose of DORA is to improve the level of the EU financial sector by ensuring all financial entities have the same standards. Read our article to find out how it applies to crypto businesses.
Get DORA compliance support
