The Digital Operational Resilience Act (DORA) Compliance: What You Need To Know

Digital threats are undoubtedly ever-evolving. To address this, the European Union has taken a significant step to fortify its financial sector’s cybersecurity. The Digital Operational Resilience Act (DORA) is set to reshape the landscape of digital security in finance, with far-reaching implications for both traditional institutions and emerging Web3 projects. 

As a Web3 audit security firm, Hacken is leading the charge in helping projects navigate this new regulatory environment with our DORA Compliance, a new service suite at Hacken.

What Is DORA?

The Digital Operational Resilience Act (DORA) is a comprehensive regulatory framework designed to strengthen the IT security of financial entities across the European Union. Adopted in 2023 and set to apply from January 17, 2025, DORA European regulation aims to ensure that the financial sector can maintain resilient operations despite severe operational disruptions.

This legislation protects industries that are becoming increasingly dependent on technology and are at risk of cyber-attacks.

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MiCA Regulations & DORA

The Markets in Crypto-Assets (MiCA) regulation is another important EU framework that aims to create a comprehensive regulatory regime for crypto assets, providing much-needed clarity and security. For Web3 projects, DORA compliance is crucial for meeting MiCA requirements, as many of DORA’s operational resilience and cybersecurity standards are integral to MiCA. 

In other words, adhering to DORA regulations is key to achieving full MiCA compliance and preparing your project for a regulated and secure future in the EU financial market.

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DORA Requirements

For projects that fall within DORA regulation requirements, there are special areas in which they must stand by to stay compliant with DORA. 

• ICT Risk Management Framework: Develop a comprehensive strategy for managing and mitigating information and communication technology risks.
• Cybersecurity Measures: Implement robust protection for your infrastructure, including regular penetration testing, continuous monitoring, and incident response plans.
• Incident Classification and Reporting: Quickly identify, classify, and report major incidents to the appropriate regulators as required by DORA.
• Cyber Resilience Testing: Conduct Threat-Led Penetration Testing (TLPT) to ensure your project can withstand real-world cyber threats.
• Third-Party Risk Management: Monitor and manage risks from third-party service providers to meet compliance standards.

Many of these suggestions follow best practices for maintaining digital security in an age where data and financial assets are increasingly under threat. 

Who Does DORA Mainly Apply To?

While DORA regulation was initially conceived for traditional financial institutions, its scope does extend to various entities in the Web3 space. The financial entities covered are various financial and data avenues from credit institutions, data reporting service providers, and even investing firms. 

Decentralized exchanges (DEXs), DeFi protocols, and blockchain service providers are all likely to fall under DORA’s purview. To continue operating within the EU’s regulatory framework, such entities must align their operations with DORA’s compliance standards.

What’s the Consequences of Not Complying?

Failing to comply with DORA can have serious repercussions for Web3 projects:

• Financial Penalties: Non-compliance can result in severe fines from regulatory authorities.
• Operational Disruption: Projects that don’t meet DORA standards are more vulnerable to cyberattacks and system failures.
• Loss of Trust: Non-compliance can damage a project’s reputation, leading to lost business and partnerships.

Benefits of DORA for Web3 Projects

Complying with DORA may seem daunting, but offers several benefits, especially for Web3 projects that have suffered losses, thefts, and devastation from cyber-incidents. Some of the benefits are:

• Enhanced security posture
• Improved operational resilience
• Increased trust from users and partners
• Better preparedness for cyber threats
• Alignment with global best practices in cybersecurity

When Does the Digital Operational Resilience Act Come Into Force?

DORA regulation entered into force on January 16, 2023, and will apply from January 17, 2025. This gives Web3 projects a crucial window to prepare and ensure compliance before the regulation takes full effect.

How Hacken Can Help Your DORA Compliance

As a specialized Web3 audit security firm, Hacken is uniquely positioned to assist projects in achieving DORA compliance. 

Our services include:

• ICT Risk Management Frameworks – We can help develop and implement a compliant risk management strategy tailored to your Web3 project.
• Cybersecurity Solutions – From penetration testing to incident response, we ensure your project remains secure and resilient.
• Incident Reporting Tools – Hacken provides tools to help you identify, classify, and report incidents in line with DORA requirements.
• Threat-Led Penetration Testing (TLPT) – Our TLPT services ensure your project is prepared to face advanced cyber threats.
• Third-Party Risk Management – We help you monitor and manage third-party risks to ensure compliance throughout your ecosystem.

Our team of experts understands the unique challenges faced by Web3 projects and can provide guidance on all aspects of DORA compliance.

Don’t let DORA compliance become a stumbling block for your Web3 project. Stay ahead of the regulatory curve and enhance your project’s security posture with Hacken’s DORA Compliance Service. 

Contact us today to ensure your project is ready for the future of digital operational resilience in the EU financial sector!