The primary purpose of a security audit for smart contracts is to protect investors’ funds by
identifying vulnerabilities, coding errors, and weaknesses in the smart contract or underlying
protocol that could be exploited. This proactive approach helps prevent hacks, exploits, and financial
loss.
While performance issues (B) may be noted, the critical concern is security. Identifying bad actors (C)
is not within the scope of a code audit but is a broader operational issue. Copyright concerns (A) are
unrelated.
AML and crypto governance frameworks underline the importance of security audits to mitigate
operational risks in DeFi and other smart contract-based applications.
