DORA Regulatory Compliance Checklist: Get Ready for 2025

Introduction to DORA: Building Resilience in the Digital Age

The Digital Operational Resilience Act (DORA) is an important EU regulation that enhances the resilience of financial services, cryptocurrency businesses, ICT providers, and similar organizations. As these sectors become increasingly interconnected, a single cyber incident can disrupt multiple systems and impact the economy.

DORA mandates that companies in the digital space be prepared for threats like cyberattacks, data breaches, and system failures. Starting January 17, 2025,  ICT service providers and Financial services operating within the EU must adhere to these guidelines.

Failing to comply can lead to significant fines, reputational damage, and operational challenges. With deadlines on the horizon, companies need to start preparing to ensure they meet these requirements.

This guide will help you understand what you need to do to align with the DORA compliance checklist and how to prepare ahead of time.

What is DORA and Who Does it Apply To?

The Digital Operational Resilience Act (DORA) is an EU regulation that sets strict rules and standards for financial institutions and ICT service providers. Effective January 17, 2025, it aims to resolve inconsistencies across various EU states' regulations.

DORA applies to multiple entities outlined in Article 2, including Crypto-Asset Service Providers, electronic money institutions, trading venues, payment institutions, and investment firms. Compliance can help these companies mitigate Information and Communication Technology (ICT) related risks.

It came into effect on January 16, 2023, and aims to address ICT risk management, monitoring third-party risks, digital resilience testing, and information sharing, ensuring the European financial sector can withstand digital disruptions. Notably, its scope extends beyond the EU to include companies interacting with the EU market.

Similar regulations have already impacted several firms in the past, with Binance fined €3.3 million by the Dutch Central Bank, Coinbase's UK subsidiary paying £3.5 million for breaches in July 2024, and Payeer penalized €9.3 million by the Lithuanian Financial Crime Investigation Service for AML violations.

Key DORA Compliance Requirements: A Closer Look

Businesses can prevent sanctions and strengthen their resilience by complying with the following DORA compliance requirements:

IT Risk Management

The regulation requires companies to adopt a dynamic risk management framework that evaluates and assesses IT risk and the organization's general digital risk exposure. Such a framework can detect weaknesses within the digital realm and provide measures to minimize such risks.

Incident Reporting

For crypto activities, for instance, businesses must have processes where significant IT incidents are reported, assessed, and notified to competent authorities within acceptable time frames. This obligation forms part of the steps to enhance clarity and assists in the general unresolved matters affecting users or the financial environment.

Information Security

DORA also imposes specific requirements about information security and allows companies to finance generic security measures. Data encryption, creating secure networks, and restricting access to information must be complied with to protect businesses and customers adequately.

ICT Third-Party Risk Management

Companies frequently rely on vendors, such as cloud service providers or payment processors, to support their activities effectively. However, DORA mandates that businesses evaluate and oversee the risks associated with these partnerships to guarantee that each collaborator meets security and resilience criteria. 

Resilience Testing

Businesses are also expected to regularly perform resilience testing, which involves conducting stress tests and vulnerability assessments to simulate cyberattacks and disruptions. This will test the strength of their digital infrastructure and pinpoint any vulnerabilities that need fixing. 

Data Privacy

Maintaining DORA requirements involves safeguarding customer data stored and transmitted while prioritizing GDPR compliance to protect customer privacy. 

Security and Transparency

DORA guidelines further require transparency regarding security procedures and standards. Companies must maintain transparency with customers and stakeholders concerning their security strategies and any potential service disruptions due to incidents that may occur. Adherence to DORA standards necessitates establishing a defined and documented policy to foster confidence and responsibility. 

Monitoring and Reporting on Compliance

Businesses must also track their adherence to DORA regulations by keeping records of their compliance efforts and providing reports. This involves assessments and internal reviews to show conformity with agencies and ensure that all operational facets remain safe and current. 

The DORA Compliance Checklist for 2025

With the 2025 DORA compliance deadline fast approaching, businesses need a clear roadmap to meet DORA requirements and avoid the heavy penalties for non-compliance.

Below is a DORA compliance checklist to help your business prepare:

1. Assess Your Current Resilience Posture

• Conduct a gap analysis to compare your current operations against DORA compliance requirements.
• Identify vulnerabilities in your IT systems, data security, and risk management processes.

2. Develop an Incident Reporting Framework

• Establish a system for identifying and reporting cybersecurity incidents within 24 hours.

• Train your team to recognize threats and respond promptly.
• Implement clear communication channels with regulators and stakeholders.

3. Strengthen Cybersecurity Measures

• Enhance your DORA security compliance by integrating strong encryption, multi-factor authentication, and real-time monitoring.
• Regularly conduct penetration testing and vulnerability assessments.

4. Set Up a Third-Party Risk Management Plan

• Identify critical third-party vendors (e.g., cloud providers, smart contract auditors).
• Ensure all vendors comply with DORA regulations and have robust security protocols.

5. Create a Comprehensive Business Continuity Plan (BCP)

• Define how your business will continue operations during a disruption.
• Include backup systems for data recovery and real-time system switching.
• Test the BCP regularly to ensure readiness.

6. Adopt DORA Compliance Tools

• Leverage DORA compliance software like Hacken Extractor or apps to automate reporting, monitoring, and tracking regulatory changes.

7. Train Your Workforce

• Conduct ongoing training sessions to ensure all employees understand DORA legislation and their roles in maintaining compliance.
• Use real-world scenarios to prepare for potential threats.

8. Stay Updated on Regulations

• Monitor updates to DORA legislation and adjust your processes accordingly.
• Consider hiring DORA compliance consulting services for expert guidance.

Consequences of Non-Compliance: What’s at Stake?

Non-compliance with the Digital Operational Resilience Act can lead to serious problems for EU and UK businesses operating in the financial sector, particularly those in the growing Defi and crypto sectors. Since the act became active on January 16, 2023, the DORA non-compliance penalties will take effect on January 17, 2025.

However, not complying with the DORA legislation goes beyond regulatory troubles. The survival of the non-compliant company is also at stake. Firms that ignore DORA risk falling behind in a competitive market where resilience is no longer optional.

So, here are the major risks of not complying with the DORA compliance requirements:

Financial Penalties

Types of Fines and Measures:

1. Individuals:
   • Public disclosure of violations.
   • Cease-and-desist orders to stop and prevent recurrence.
   • Fines up to EUR 1 million for specific violations or EUR 5 million for severe breaches.
2. Legal Entities:
   • Fixed fines of up to EUR 5 million or a percentage of annual turnover:
     • 3% for certain compliance failures.
     • 5% for more significant breaches.
     • 12.5% for critical violations affecting market integrity or operations.
   • Penalties based on consolidated turnover for corporate groups.

Additional Measures:

• Suspension or withdrawal of authorizations for crypto-asset service providers.
• Temporary bans on management roles for responsible individuals (up to 10 years for repeated offenses).
• Trading restrictions and profit disgorgement for financial gains from infringements.

Implementation and Reporting:

• Member States must publish penalty decisions and report annual enforcement data to ESMA and EBA.
• ESMA maintains a central database for penalty records, accessible only to regulators.

Operational Risks

Ignoring DORA can leave firms vulnerable to operational breakdowns during cyberattacks or technical disruptions. Non-compliant companies risk system failures that can halt trading activities or disrupt access to crypto wallets. This downtime can directly impact revenues and drive customers toward better-prepared competitors.

Reputational Damage

Crypto firms thrive on trust; a single misstep can ruin their reputation. Imagine a crypto exchange being hacked due to non-compliance with DORA’s ICT security standards. The resulting media scrutiny and loss of user confidence could tarnish the firm’s reputation for years, leading to customer churn and decreased market share.

DORA Compliance Deadline: What You Need to Know

The DORA compliance deadline has been set for January 17, 2025, and early preparation is crucial for businesses in the digital financial sector to avoid penalties and ensure operational resilience. 

Starting now allows organizations to map out key milestones, such as assessing current resilience, addressing cybersecurity gaps, and investing in compliance tools like the Hacken Extractor, simplifying monitoring and reporting.

By starting early, you can:

• Spread the workload over months and avoid a last-minute rush.
• Identify and address gaps in your current systems.
• Test and refine solutions to ensure they meet DORA's standards.
• Mitigate the risk of penalties or operational disruptions due to non-compliance.

Choosing the Right DORA Compliance Framework for Your Organization

Proper framework selection is essential for navigating the DORA compliance checklist and ensuring that your organization meets all the requirements with little effort.

However, selecting the appropriate framework is about ticking boxes and simplifying compliance resilience within a company.

A well-chosen framework aligns business operations to comply with DORA regulation's demands. Hence, organizations typically take two approaches to DORA compliance consulting: managing compliance in-house or outsourcing it to external experts.

In-House Compliance Management:

In-house compliance management ensures full control over compliance processes tailored to your organization's structure. However, this approach is suitable for large organizations with a strong internal group able to manage the demands of DORA compliance; this requires expert-level knowledge, substantial resources, and considerable time outlays.

Outsourced Compliance Management:

Outsourced Compliance Management, on the other hand, provides immediate access to industry expertise, faster time to implementation, and less internal resource strain. Nevertheless, it is usually costlier and reliant on third-party vendors. Generally speaking, it is a good strategy for SMBs or those just starting their DORA security compliance process.

Tools and Resources to Streamline Compliance

Here are the resources that will make the DORA compliance process much easier, whether leveraging in-house or outsourced:

1. DORA Compliance Software

Solutions like Hacken Extractor automate monitoring, reporting, and documentation, saving you manual efforts.

2. DORA Compliance Checklist Templates

Pre-designed templates will guide you through the DORA compliance framework step by step, ensuring you leave nothing behind. 

3. DORA Compliance Applications  

These applications will enable you to track deadlines, report incidents, and stay updated on changes to the DORA legislation.

4. Training and Educational Resources

Lastly, training tools, webinars, and compliance guides will be in place to prepare your team for audits and ensure consistent compliance.

Using Hacken Extractor for DORA Compliance: Benefits and Key Features

A reliable and efficient tool is essential for meeting the DORA compliance requirements. Hacken Extractor is a modern solution developed to assist crypto and blockchain businesses in simplifying the road to DORA compliance and staying one step ahead of possible security risks. 

Here are some key features of Hacken Extractor:

Real-Time Monitoring

The Hacken Extractor is a tool that continuously monitors your blockchain addresses for transactions that go through user-defined security triggers. Upon meeting the set triggers, conditions are set in motion for sending instant alerts, thus helping businesses pinpoint issues before they spiral out of control.

Security Triggers Customization

You can customize these triggers to track specific conditions relevant to your organization's operations so that you are only notified of high-priority events.

Every trigger includes a set of parameters, including a descriptive title, an assigned importance level ranging from low to high, and the inputs provided to a function within the contract.

Full Risk Assessment

Everything from advanced attack detection to suspicious activity identification flags high-risk accounts and contracts. This proactive approach to risk management is in tune with DORA's emphasis on IT risk monitoring. 

Automated Reporting

DORA requires detailed documentation of all risks and incidents. Hacken Extractor automates these processes and provides detailed reports, which reduce the burden of manual reporting and make it fully accurate.

Seamless Setup

It's easy to start with Hacken Extractor because you can choose an automatic setup, which will give you recommendations for monitoring based on your smart contract type, or set everything up manually and customize it. 

DORA Compliance Consulting: Getting Expert Help

DORA compliance consulting could simplify the process of the DORA EU regulation. DORA security compliance consulting involves working with specialized advisory firms or consultants who will help your business align with the DORA regulation.

These experts provide actionable strategies for meeting the strict DORA compliance requirements, ensuring businesses are fully prepared by the January 2025 compliance deadline.

So, why work with a DORA Consultant?

DORA focuses on building strong systems to manage cyber risks, protect data, and maintain operational continuity, not just following rules. Compliance consultants help break down DORA requirements into clear steps, including creating a customized DORA compliance checklist for your organization.

Experienced consultants also offer tools like DORA compliance software or apps that simplify compliance. These tools can track compliance, assess risks, and keep records related to DORA standards up to date.

Moreover, consultants can help you avoid significant fines and damage to your reputation by addressing your vulnerabilities in IT systems or third-party relationships.

Essential Tools for a Comprehensive DORA Compliance Solution

To ensure compliance with the DORA compliance checklist, you'll need the right tools to streamline your processes and keep track of risks in real time. Here are some recommended DORA compliance software and applications to help meet security and reporting requirements:

Hacken Extractor:

Hacken Extractor is the best tool in your DORA compliance journey in crypto and blockchain. It provides real-time risk management by helping identify vulnerabilities in your systems and offering tailored solutions. This tool is Web3-first and great for businesses looking to monitor their cybersecurity posture and ensure they adhere to DORA security compliance requirements.

Here are some features of the Hacken Extractor DORA compliance tool:

• Monitor your blockchain and smart contract activities in real time to detect threats early.
• Automate protective actions like pausing contracts or emergency withdrawals based on monitoring events.
• No setup is needed—just enter your address to start using the tool immediately.
• Compatible with 17 EVM networks (like Ethereum, Polygon, Base, and Binance Smart Chain) and non-EVM networks (like Stellar and ICP).

Dora Compliance Suite

Hacken compliance experts thoroughly assess and guide your project to ensure full adherence to the Digital Operational Resilience Act (DORA). This includes developing risk management frameworks, implementing cybersecurity measures, and ensuring resilience to operational disruptions.

OneTrust GRC

OneTrust GRC is another DORA compliance application that integrates governance, risk, and compliance tasks in one place. It automates many processes, reducing the manual work needed and helping you monitor your compliance status continuously. Key features include identifying weaknesses in your digital environment, tracking and reporting real-time incidents for quick solutions, and monitoring vendors and third-party providers to meet DORA's strict requirements.

MetricStream IT Risk Management

MetricStream helps financial institutions stay resilient by reducing risks and simplifying compliance reporting. Its AI tools make it easier to identify trends and take early action.

It also clearly shows IT risks and their potential effects, thanks to the use of AI to predict and prevent risks before they become serious issues, helping your organization meet DORA compliance standards.

LogicGate Risk Cloud

LogicGate's flexibility makes it ideal for businesses with unique operational setups. Its collaboration features to ensure all stakeholders are on the same page, reducing compliance gaps.

The top features of this DORA compliance software are that it tailors risk management processes to your organization's needs, automatically evaluates potential threats, provides actionable insights, and allows teams to coordinate and document real-time compliance tasks.

UpGuard Vendor Risk Management

UpGuard focuses on third-party risks, a critical area under DORA regulations. Its automated scoring system helps prioritize which vendors need immediate attention.

It stands out by continuously assessing and scoring third-party vendors for compliance risks, providing updates on security breaches and vulnerabilities, and highlighting areas where your organization meets or falls short of DORA requirements.

Conclusion: Preparing for DORA Compliance in 2025

Beginning early with Digital Operational Resilience Act (DORA) compliance may prevent last-minute problems. A DORA compliance checklist will help keep all steps organized, and technical requirements may be fulfilled using tools like Hacken Extractor.

So, if you operate your cryptocurrency business in the European Union (EU) or the United Kingdom (UK), following the DORA compliance framework is key to digital resilience. 

Furthermore, you can seek DORA compliance consulting to create appropriate solutions for your business. Start preparing for the 2025 DORA compliance deadline and make your company resilient, compliant, and ready for regulatory approval.