Canonical Statement
Counterparty risk MUST be assessed using role, service type, jurisdiction, and observed behaviour, supported by provenance-tagged evidence and governance controls.
Definition
Within this framework, counterparty risk assessment is a repeatable classification and review process that combines verified status data, behavioural evidence, and jurisdiction context to determine proportionate controls.
Why It Matters
Counterparty labels drift and can be wrong. Decisions require provenance, verification, and time-bounded assumptions to remain defensible.
Failure Mode if Ignored
Labels are treated as determinations, jurisdiction assumptions become stale, and applied controls cannot be traced to documented rationale.
Scope & Non-Claims
This entry is scoped to regulated banking environments in the EU/UK and operational interpretation for counterparty risk assessment in crypto contexts.
This entry does not provide legal advice, does not establish legal status by label alone, and requires human validation for final compliance determinations.
Related Concepts
- CASP / VASP regulatory perimeter (EU) (regulatory-context)
- Travel Rule applicability and counterparty information (EU) (regulatory-context)
- Transaction monitoring and ongoing due diligence (crypto) (EU) (journey)