Crypto Industry Urgently Needs Crisis Response Protocols After FTX, Terra Collapses

The crypto industry is renowned for its rapid innovation and speed, but when it comes to crisis management, it is as vulnerable as traditional finance. Unlike traditional finance, crypto lacks clear regulations, central oversight, or even shared crisis protocols, exacerbating the situation. In traditional finance, a crisis can usually be contained through well-established frameworks, with central banks and regulators providing support. However, in crypto, a single event can quickly escalate into a major crisis due to the lack of accountability and the rapid spread of information on social media.

This is not a hypothetical scenario; we have seen such cases before. The instability of the entire ecosystem and its future is at stake, not just for individual projects and investors. To address this, the crypto industry must acknowledge that black swan events are not rare but are a part of the landscape. Preparing for these events should be a core business practice, not an afterthought. Smart, adaptive protocols should be planned in advance to avoid reacting haphazardly when a crisis occurs.

Traditional finance operates on structure, with rules, regulators, and a long history of crisis management models. In contrast, crypto lacks a unified regulator, standard response templates, or established procedures. When something goes wrong, there is often no central authority to turn to, which is terrifying for users and investors. A situation that might be considered a contained incident in traditional banking can turn into a full-blown catastrophe in crypto. From flash crashes and protocol exploits to project implosions, crypto lives on the edge. The rapid spread of information or misinformation on social networks leaves platforms with no time to regroup.

Black swan events are part of the natural rhythm of the crypto market. The collapses of Terra, FTX, and Celsius were wake-up calls. The industry needs intelligent crisis response protocols built specifically for this industry. This means planning for both the expected and the unexpected, and being able to act on those plans with the speed and transparency that crypto demands.

The collapses of FTX and Terra were not just technical or financial crises; they were also communicational. The lack of clear communication and accountability drove the final nail into the coffin. When FTX started crumbling, users and investors were left in the dark, with no clear message or trustworthy figure to explain what was happening. 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. When communication finally arrived, it was delayed and did not help in reassuring people.

From personal experience, the crypto community has many smart people who are good at building things. However, they often operate under the assumption that “this can’t happen to us.” This mindset is dangerous because it is fundamentally wrong. There is no such thing as an “unexpected” crisis—only the ones you didn’t prepare for ahead of time. Silence won’t protect you from chaos. The absence of clear responsibility and proactive messaging can turn technical failures into trust failures, which are far harder to rebuild.

It’s not just about avoiding mistakes—it’s about handling them when they inevitably come. Every serious crypto company needs a crisis playbook. This playbook should include a real-time response plan to incidents, a communication tree that defines who speaks, when, and across what channels, and 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. With a proper playbook, teams can contain the damage early and hold on to their community through the storm.

Crypto likes to say it’s “trustless,” and that protocols are autonomous. However, when things go sideways, people look to leaders, not strings of code. In a crisis, the public wants a face, a voice, a leader. 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 nice-to-have—it’s a core component of business resilience. It builds legitimacy and provides reassurance to clients during uncertain times. A strong, authentic voice from leadership gives people something to anchor to. It can stabilize 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 decentralized, credibility is everything. If you’re building something real, your reputation needs to be as resilient as your code. 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.