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The crypto industry is known to take pride in its speed and innovation, but when it comes to crisis management, it is every bit as vulnerable as traditional finance. However, unlike TradFi, crypto lacks clear regulations, central oversight, or even shared crisis protocols, which makes things even worse.
In TradFi, a crisis situation can usually be contained through well-established frameworks—when things take a bad turn, there are central banks and regulators to turn to for help. In crypto, however, a singular event can spiral into a proverbial wildfire within hours, as viral panic on social media and a glaring absence of accountability fan the flames further.
This isn’t a hypothetical scenario—we’ve already seen cases like that before. And that’s a problem—not just for individual projects and investors, but for the stability of the entire ecosystem and its future.
So, what can be done? It starts with acknowledging that black swan events in crypto aren’t a rarity—they are a part of this landscape. Which means preparing for them should be a core business practice, not an afterthought. Plan in advance with smart, adaptive protocols, instead of tearing your hair out when the crisis is already upon you and all you can do is react haphazardly.
Why TradFi risk frameworks don’t work in crypto
To reiterate my previous point, TradFi runs on structure. There are rules, regulators, and a long history of crisis management models to draw from. Admittedly, they, too, need to be adjusted for modern-day realities, but that’s a whole other topic. For now, let’s stay focused on crypto—and what we have here is not very inspiring.
No unified regulator, no standard response templates or established procedures, often not even a central authority that clients can turn to in case a disaster strikes. When something goes wrong, no one knows who’s in charge—and that’s terrifying for users and investors alike.
The result? A situation that might be considered a ‘contained incident’ in traditional banking, for example, risks turning into a full-blown catastrophe in crypto. From flash crashes and protocol exploits to straight-up project implosions, crypto lives on the edge. And the pace at which information (or misinformation) spreads on X (former Twitter), Reddit, and other social networks leaves platforms with no time to regroup.
And nobody can pretend such crises are just one-off occurrences. Terra, FTX, Celsius—all of them were wake-up calls. Black swan events are part of the natural rhythm of this market. And what it needs to better prepare for them is not wishful thinking, but intelligent crisis response protocols built specifically for this industry. That means planning for both the expected and the unexpected—and, when the time comes, being able to act on those plans with the speed and transparency crypto demands.
The consequences of silence
For many people in crypto, the collapse of FTX and the collapse of Terra are still notorious enough that I don’t need to revisit the details and monetary losses in this article. But what’s often overlooked is how the crisis wasn’t just technical or financial—it was communicational.
Those events ended up being so destructive for the industry as a whole, not just because of poor risk management or flawed tokenomics. It was silence and confusion that drove that final nail into the coffin.
When FTX started crumbling, users and investors alike didn’t know what was happening. There was no clear message, no accountability, and no trustworthy figure stepping up to clearly explain what was happening. And much the same happened with Terra. People were left guessing, and panic and misinformation filled the void. With no credible communication to combat them, trust vanished overnight. And when communication did finally arrive, it came delayed and didn’t help at all in reassuring people.
From personal experience, I know that the crypto community has no shortage of very smart people who are good at building things. But far too often, they operate under the assumption that “this can’t happen to us.” That’s a dangerous mindset, because it’s fundamentally wrong. There is no such thing as an “unexpected” crisis—only the ones you didn’t prepare for ahead of time.
And when the chaos is already here, silence won’t protect you from it. The absence of clear responsibility and proactive messaging can all too easily turn technical failures into trust failures, which is far harder to rebuild.
It’s not just about avoiding mistakes—it’s about handling them when they inevitably come.
It’s time for crisis playbooks, not just whitepapers
If there’s one actionable takeaway from the past few years, it’s this: every serious crypto company needs a crisis playbook. And not just a theoretical one—it has to be alive, regularly updated, and realistic. Ready to go when things go sideways.
That playbook should include:
- A real-time response plan to incidents that accounts for coordination between PR, legal, and user support teams.
- A communication tree that defines who speaks, when, and across what channels.
- Pre-approved messaging templates for common scenarios like hacks, outages, or regulatory scrutiny.
Without a plan and a functional chain of command, even small issues can spiral and trigger a domino effect, causing user flight and media firestorms. But with a proper playbook, teams can contain the damage early and hold on to their community through the storm.
The paradox of decentralised leadership: Trustless doesn’t mean leaderless
Crypto likes to say it’s “trustless,” and that protocols are autonomous. But when things go sideways, people don’t look at strings of code—they look to people. In a crisis, the public wants a face, a voice, a leader. That’s why founders and core team members behind projects must be visible, credible, and prepared to lead, not hide behind pseudonyms.
A strong personal brand isn’t just a thing that’s nice-to-have—it’s a core component of business resilience. It builds legitimacy and provides reassurance to your clients during uncertain times. A strong, authentic voice from leadership gives people something to anchor to. It can stabilise a community, calm investors, and steer the narrative during volatile moments.
In many cases, a founder’s reputation can even be more valuable than their legal or technical protections. When regulation is confusing and systems are decentralised, credibility is everything. So if you’re building something real, your reputation needs to be as resilient as your code.
Build like a crisis is coming—because it is
The crypto industry has evolved at an astonishing pace, but it’s also high time for it to mature in how it handles risk. Black swan events aren’t once-in-a-decade exceptions—they’re part of the terrain, and planning for them as inevitabilities is what’s going to set serious players apart going forward.
You don’t need to know when or how the next shock will come. But you do need to be ready when it does. Don’t wait until something breaks before you think about how to fix it. The strategies and communication protocols you put in place now will define whether your project is still standing five years from today.
