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Lessons from 2023: the FTX trial and crisis management for crypto projects | Opinion

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Few events have stirred as much attention as the Sam Bankman-Fried trial. As allegations of fraud and money laundering surface within FTX’s affiliated Alameda Research, the crypto community is reminded of the need for robust crisis management. Crypto projects operate in a perfect storm of volatility, regulation, hacks, and technical complexity. Any misstep can snowball into an existential crisis in an instant.

Crises in crypto aren’t limited to legal battles. The threats are multifaceted, from unauthorized data access and technical code vulnerabilities to malicious hacks. Add to that the ever-changing regulatory environment, and projects find themselves navigating a maze of potential pitfalls.

And the proof is the data. In 2023, $1.89 billion was lost due to 297 crypto hack attacks. This translates to a loss of $289K every hour. Last year, hackers stole crypto worth $3.8 billion, making it the worst year on record per Chainalysis.

This guide outlines the five critical steps your crypto project must take to crisis-proof itself—from assembling your response team to analyzing threats and managing communications. With the right plan, your next crisis doesn’t have to become a death spiral.

When a crisis hits, you need the right people in place to respond quickly and effectively. Start by designating a crisis lead based on the situation. For legal issues, your general counsel may take points. Empower your CTO or head of engineering to take charge of technical crises.

Next, alert your communications team. Their role will be drafting statements, liaising with the media, and managing public perception. Identify a company spokesperson—ideally, your CEO or another senior leader.

Finally, inform key advocates and loyal community members. Their organic support on social media will be invaluable if the crisis goes public.

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Author: Trey Ditto

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