Crypto Can’t Afford Another Communication Crisis

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This is part two of our three part series on com­mu­ni­ca­tion in cryp­tocur­ren­cy, touch­ing on what Web3 does well — and what Web3 does not so well — in com­mu­ni­cat­ing its mes­sages to the wider world.

You can find part one on Web3 lan­guage bar­ri­ers here.

It’s time we learned our les­son: With­out effec­tive com­mu­ni­ca­tion, a cryp­to project will strug­gle to gain the trust of the market. 

Ear­li­er this year, Sil­i­con Val­ley Bank col­lapsed as a direct result of a break­down in com­mu­ni­ca­tion. This led to the biggest US bank­ing cri­sis since 2008, which expand­ed even to cryp­to, caus­ing Circle’s sta­ble­coin to tem­porar­i­ly depeg.

We had already been taught a valu­able les­son last year by FTX’s Sam Bankman-Fried on how not to com­mu­ni­cate dur­ing a cri­sis. It took a short Twit­ter exchange between Bankman-Fried and Binance’s CZ to spark uncer­tain­ty around the inter­nal health of the FTX bal­ance sheet, which even­tu­al­ly snow­balled into the col­lapse of the FTX empire.

Trust is an invalu­able asset — a founder’s abil­i­ty to com­mu­ni­cate effec­tive­ly dur­ing a cri­sis can either make or break a project in the face of adverse mar­ket conditions. 

Cryp­to can­not afford anoth­er com­mu­ni­ca­tion break­down that might set off any more bank runs.

Communication matters

When fear, uncer­tain­ty and doubt rip­ple through cryp­to mar­kets, many look to founders for reassurance. 

With­out proac­tive, strate­gic com­mu­ni­ca­tion, uncer­tain­ty in the mar­ket may then trans­late into uncer­tain­ty in a project. 

Because with­out being clear and trans­par­ent about inter­nal hap­pen­ings, cus­tomers are only going to want to know one thing when crises arise: Where is my mon­ey? And finan­cial insti­tu­tions often mis­tak­en­ly defer to dis­cussing num­bers first before con­sid­er­ing the deliv­ery and tone of the message. 

In SVB’s case, their March 8 press release regard­ing their new cap­i­tal raise omit­ted the rea­son for need­ing to raise cap­i­tal. It spat out num­bers and offered no real insight into the business’s well-being. Had the bank been more trans­par­ent and offered more clar­i­ty, we may not have seen the biggest finan­cial cri­sis since 2008.

In Web3, the sur­vival of a project depends just the same on the community’s per­cep­tion of what is impor­tant. Projects should con­sid­er giv­ing their stake­hold­ers a fuller pic­ture of the sto­ry that reas­sures and high­lights how they’re going to move for­ward, regard­less of whose fault the cri­sis is. 

Web3 means that the com­mu­ni­ty has a stake and can vote for and against cer­tain deci­sions in projects. This influ­ence over a project’s suc­cess means that proac­tive­ly keep­ing the com­mu­ni­ty in the loop is necessary.

A crisis communication plan is a risk management plan

Hav­ing a cri­sis com­mu­ni­ca­tion plan is the non-tan­gi­ble lay­er of secu­ri­ty that projects don’t real­ize they need until some­thing goes awry. 

The Euler Finance hack back in March was the biggest cryp­to hack yet in 2023. With over $200 mil­lion tak­en, the flash loan attack left users des­per­ate for answers. But when news of the hack broke, Euler didn’t have a clear cri­sis comms plan. 

In an ini­tial tweet, the project alert­ed its users that a hack had hap­pened — but their mes­sage lacked clar­i­ty. Euler missed shar­ing pre­cau­tion­ary instruc­tions with users as well as high­light­ing what this hack meant for their funds. Their fol­low-up includ­ed more infor­ma­tion on what went wrong — but again failed to address the community’s wor­ries and did not detail plans to make users whole. 

Euler Finance has since suc­cess­ful­ly recov­ered the funds, which is great (if unex­pect­ed) news. But even the recov­ery state­ment — which told the com­mu­ni­ty about the pret­ty darn pos­i­tive update that all $200 mil­lion had been returned — lacked an empa­thet­ic tone of voice or any insight into how the pro­to­col would move for­ward from this sit­u­a­tion. It was to the point and direct, which was cer­tain­ly prac­ti­cal, but it could have rep­re­sent­ed its com­mu­ni­ty spir­it, ethos and val­ues better. 

If lead­ers and projects in cryp­to want to sur­vive and thrive in this volatile mar­ket, hav­ing an effec­tive com­mu­ni­ca­tions plan and strat­e­gy should already be a pri­or­i­ty. We’re long past the days when the cryp­to indus­try was small enough where a foot-in-mouth tweet could just be laughed off or for­got­ten due to short mem­o­ries — cri­sis com­mu­ni­ca­tion mat­ters, and poor com­mu­ni­ca­tion, even if unin­tend­ed, can no longer be excused. The tools are at your fin­ger­tips — use them.


Saman­tha Yap is the founder and CEO of YAP Glob­al, a PR and com­mu­ni­ca­tions con­sul­tan­cy firm spe­cial­iz­ing in cryp­tocur­ren­cy, decen­tral­ized finance (DeFi), and Web3. She’s a pio­neer in the cryp­to PR field and a key cryp­to “translator.”Samantha also hosts a pod­cast series on ‘The Sto­ry of Mon­ey by YAP Cast. Pri­or to this, Saman­tha worked as a broad­cast jour­nal­ist and pro­duc­er for Chan­nel NewsA­sia Sin­ga­pore and gained exten­sive inter­na­tion­al jour­nal­ism expe­ri­ence across var­i­ous countries. 


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