A Risk-Based Approach focuses on identifying and assessing the various risks associated with cryptocurrency transactions and investments. It emphasizes understanding potential threats like fraud, market volatility, regulatory changes, and cybersecurity vulnerabilities.By prioritizing risk assessment, individuals and businesses can allocate resources effectively to mitigate these risks. This approach involves continuous monitoring and adapting strategies based on evolving market conditions and emerging threats.For example, an investor might analyze the historical performance of a cryptocurrency, assess the credibility of the project, and evaluate market trends before committing funds. Similarly, exchanges and service providers adopt this approach to implement security measures tailored to the level of risk they face.Overall, a Risk-Based Approach helps in making informed decisions, enhancing security, and fostering trust in cryptocurrency transactions and investments.