Canonical Statement
Crypto risk scoring MUST be risk-based, explainable, and calibrated to observable evidence and control objectives; it MUST NOT be treated as a definitive determination of illicit activity or regulatory compliance.
Definition
Within this framework, risk scoring calibration is the governed process of defining measurable inputs, weighting and threshold logic, periodic review, and drift monitoring so scores remain proportionate to institutional obligations and decision use-cases.
Why It Matters
Uncalibrated or opaque scoring creates false precision. Without traceable logic and review discipline, scores become non-defensible and can distort prioritisation, due-diligence depth, and escalation outcomes.
Failure Mode if Ignored
Scoring logic cannot be linked to evidence, threshold changes are undocumented, and high-impact decisions are driven by score outputs alone, creating governance, audit, and supervisory risk.
Scope & Non-Claims
This entry is scoped to regulated banking environments in the EU/UK and operational interpretation for explainable risk scoring and calibration in crypto compliance contexts.
This entry does not provide legal advice, does not constitute legal determination, and requires human validation for final compliance decisions.
Related Concepts
- Transaction monitoring and ongoing due diligence (crypto) (EU) (journey)
- Crypto red flags and typologies in monitoring (EU) (methodology)
- Sanctions exposure and screening in crypto contexts (EU) (methodology)