Some may not be surprised that the maturing blockchain industry is all too familiar with scandals and PR crises, mainly stemming from the presence of scam projects and bad actors tarnishing the industry’s reputation. Despite the rapid rise of cryptocurrencies and the growing number of blockchain applications we see today, the industry is still relatively volatile.
This volatility affects both established companies and emerging startups looking to make an impact in the industry. For a major blockchain platform that supports several crypto and Web3 projects, as well as thousands, if not millions of regular users, mishandling a PR crisis can foster serious distrust in the community and cause irreparable damage to its reputation. For a fledgling startup aiming to secure funds, nothing scares away potential VCs and investors faster than a bungled PR crisis.
Let’s take a look at a couple crypto PR crises to see what can be learned from them, while also examining the benefits that come from partnering with an experienced blockchain PR agency.
The Bad: Mt. Gox
In the early days of crypto, prior to Ethereum’s launch, Mt. Gox was the world’s largest Bitcoin exchange platform, handling 70 percent of all transactions. In February 2014, the Tokyo-based company abruptly suspended all trading and filed for bankruptcy, citing the loss of around 850,000 BTC—a figure worth around $460 million at that time.
The company initially claimed the loss resulted from a technical issue called “transaction malleability,” which hackers exploited to run off with the funds. Ensuing investigations, however, revealed that Mt. Gox had suffered from long-term security vulnerabilities and possible fraud.
The lack of transparency, poor communication in response to the event, and failure to implement proper security measures were major PR no-nos made by the company, and in particular, its young CEO, Mark Karpeles. It’s still unclear what exactly happened to Mt. Gox’s nearly half billion worth of Bitcoin, but it’s believed that the exchange did have major security vulnerabilities, but also that insider manipulation and bad management were also contributing factors.
An experienced blockchain PR agency would likely have advised Mt. Gox to get out in front of the story before the avalanche of bad PR shaped the narrative for them. Their poor response demonstrated a lack of accountability, and in these types of crises, the most important thing is to convey understanding, accountability, and transparency.
The Good: Binance
In 2019, Binance, one of the world’s premier crypto exchanges, suffered a hack of more than 7,000 BTC ($40 million at the time), stolen directly from its hot wallet. Binance immediately took action by addressing the public and, more specifically, its massive community of avid and casual crypto users. Binance clearly communicated it experienced a “large-scale security breach” and that it was able to locate the wallet where the stolen funds were directed.
Instead of stoking fear and uncertainty among their users and the wider crypto community, Binance took full responsibility, quickly assuring a thorough investigation and that no user funds would be affected.
In the aftermath, Binance established various security measures and conducted a rigorous audit of its systems to make sure any future incidents would be defended against. Furthermore, the company encouraged users to employ two-factor authentication and utilize other security features provided by Binance to bolster the security of its users’ accounts.
By properly managing the crisis from the start, Binance was able to maintain its credibility and weather the storm, and to this day is seen as one of the most trusted and respected major crypto platforms in the world. We’ll see if the company is able to weather the storm it’s facing now, under SEC scrutiny, just as effectively.
Why you need a blockchain PR agency
These two polar-opposite examples demonstrate the value that a proper PR response can provide when a crypto/blockchain company experiences a crisis. Not all crises are equal, but having a dedicated blockchain PR agency to help manage and navigate through them is an invaluable resource for any organization in the industry.
Whether a nascent DeFi project or an established crypto exchange trading more than 50 different tokens, it’s always beneficial to consult with a blockchain PR agency that understands the unique industry nuances and can quickly advise on tangible actions that can be taken.
ReBlonde provides innovative blockchain and crypto startups with the necessary PR services to not just succeed, but overcome any crisis with a seamless crisis management response. ReBlonde’s services go above and beyond just navigating your business through a crisis with its reputation management.
ReBlonde’s skilled team leverages advanced tactics, such as online reputation management, to mitigate any negativity associated with a client’s brand while simultaneously emphasizing the value of its products or services.
With over a decade of veteran PR experience within the blockchain space, ReBlonde can run your crypto PR operation, getting your company’s narrative published in the best places. Get a free consultation with us today to discuss your PR needs!