- Crypto lacks a strong risk management culture and crisis planning.
- Without clear leadership and communication during crises, projects fuel panic and erode trust rapidly.
- Reputation is crypto’s ultimate safeguard, and visible, accountable leadership is essential to protect it.
The crypto industry has a risk problem, not because the technology is flawed, but because the culture around it is still flawed. In traditional finance, risk management is a core function. It’s baked into the system. In crypto, however, it’s often an afterthought.
Large players such as centralized exchanges, custodians, and infrastructure providers often lack formal crisis response protocols. There are no widely adopted industry standards for stress testing, and few teams treat risk as a constant companion to be expected rather than a distant threat.
This illusion of control leaves the door wide open for trouble. A hiccup in one corner of the ecosystem can spark a chain reaction of distrust.
And in crypto, reputation can collapse faster than any blockchain can confirm a transaction.
FTX, Terra, and Multichain: Failures of Responsibility
When FTX collapsed back in 2022, most headlines focused on missing funds and failed oversight. But underneath the numbers, there was a deeper problem: no one was clearly in charge of putting things back in order.
The same also held true for Terra’s algorithmic stablecoin meltdown and the disappearance of Multichain’s CEO a year later.
In each case, the resulting chaos wasn’t just triggered by technical issues or market forces. It was fueled by a vacuum in communication.
In the end, rumors flew out of proportion, and by the time anyone did step up to talk about the problem, it was already too late to give anything but empty platitudes.
When a crisis hits, investors and users want leadership. They want to know who’s speaking for the project, who’s managing the fallout, and what’s being done to prevent further damage.
Without clearly communicating all of those points, you leave an opening for panic to set in. In crypto, where information and misinformation spreads through social media at great speeds, a lack of clarity isn’t neutral, nor does it protect you. It’s just toxic, poisoning the trust of your clients and stakeholders until they feel the need to leave to protect themselves before things get even worse.
Until crypto builds a culture of clear accountability, we’ll keep seeing history repeat itself.
Crisis Plan for Crypto
I hold the opinion that even among TradFi companies, more could stand to take crisis management more seriously. And that is doubly true in the crypto industry’s case.
Banks and institutions have detailed crisis playbooks, though in practice they tend to be outdated and not very relevant in modern-day realities. But for crypto platforms, such playbooks often don’t exist at all.
As I mentioned at the start of this article, most companies still assume the “it won’t happen to us” mindset. So when it does, they’re caught flat-footed — no preparations, no scenarios in place, no internal task force to swiftly move in and handle the problem.
But to be clear, crypto doesn’t need to copy-paste TradFi’s methods. It needs its own. It needs crisis playbooks that account for real-time sentiment swings, the fragmented state of global crypto regulation, and an emotionally charged online community.
A good crisis plan isn’t about bureaucracy, and it shouldn’t be dismissed as something to take care of “later.” It is crucial to your survival and continued success. It should be constantly updated and treated like an active instrument, instead of just collecting dust somewhere in the far corner.
In an industry where a single inopportune tweet can wipe billions in value, being unprepared is not just risky — it’s reckless.
Trust Requires Faces
The crypto environment is full of tech-oriented people and project builders for whom “code is law” is the preferred way of doing things. But in a crisis is, people look for faces, not whitepapers or technical documents. When things go wrong, users want to see leaders step up and take responsibility for fixing things.
Even in decentralized ecosystems, someone needs to be seen acting as the voice of reason. Every project needs to have a dedicated spokesperson who can provide clarity and reassurances to the community when things go wrong. These are all necessary things to ensure that people’s trust in your business can be maintained.
A visible, accountable leader can make or break a crisis response. That’s why personal reputation and openness aren’t optional anymore. They have to be part of your security stack from day one.
Given that regulation in crypto is still vague and fragmented, having a solid reputation is the first and last line of defence for your project.
Ask yourself: if a black swan event hit your business today, who would stand up, speak out, and steer the ship through the tidal waves? If you can’t give a clear answer, then maybe it’s time to start thinking about it.
