A sub-processor, in the context of crypto data processing and regulatory compliance, is a third-party service provider engaged by a data processor to perform specific data processing activities on behalf of the original data controller. This creates a layered responsibility chain for personal data handling.
Mechanism
The sub-processor receives personal data from the primary data processor, acting strictly under the instructions of both the data processor and, implicitly, the data controller. This often involves specialized services like cloud hosting, data analytics, or security services for crypto platforms. Strict contractual agreements are required between the processor and sub-processor to ensure compliance with data protection regulations, including adherence to security standards and data transfer rules.
Methodology
Managing sub-processors effectively necessitates a rigorous due diligence process to assess their security posture, compliance capabilities, and contractual terms. The methodology includes establishing a clear chain of accountability, obtaining explicit authorization from the data controller, and conducting regular audits of sub-processor activities. For decentralized systems, understanding data flow through various third-party oracles and infrastructure providers becomes critical to identify all sub-processing relationships.
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