What Can Crypto Crisis Managers Learn From BlockFi's Silence & tBTC's Openness?

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A crisis will inevitably happen for any business – but how it responds to it and communicates it to the public can make or break it. Let’s take a look at how two different teams in the Cryptoverse communicated their recent incidents and what advice communication professionals have provided.

BlockFi: head-in-the-sand (almost)

On May 19, it was reported that crypto lender BlockFi Suffered a data breach and said in an incident report that on 14 May, the attacker attempted to make unauthorized withdrawals of customer funds, but only had access to customers’ personal data. They added that they believe that there is no direct risk to BlockFi customers or corporate funds, that the customers may undergo more security checks during the withdrawal process, urged their customers to change two-factor authentication and whitelist and went further describing their response, stating that they continue to “ensure clear and transparent communication”.

The PR person told BlockFi on May 20 Cryptonews.com that “all affected customers were notified yesterday of the breach when it was made public directly via email on Tuesday morning at 8:30 AM EST”. If this is true, the affected customers did not know for five days that the hacker had access to their personal information such as name, email address, date of birth, physical address and activity history. The company has not responded to other questions from Cryptonews.com.

The major crypto lender has been criticized for their lack of communication about this event, not announcing it immediately, and on all of their available channels for easy access and distribution.

When it comes to their website, the company has one post on “How to protect yourself from cyber attacks” on May 18. At the time of writing, we were unable to find any information regarding this incident on their Twitter account, Medium or CEO Zac Prince’s Twitter account.

The company’s promoters and supporters were also criticized.

BlockFi is supported by investors, including that of Mike Novogratz Galaxy Digital Ventures and Anthony Pompliano Morgan Creek Digital. Novogratz and Pompliano have not mentioned the incident on their popular Twitter profiles.

Thesis & tBTC case: multiple updates on multiple channels

On May 18, a bridge between Bitcoin (BTC) and Ethereum (ETH) was, as it were, sunk by the makers. Made by venture production studio Thesis, this project aims to give BTC owners access to decentralized financial applications running on Ethereum, turning their coins into the tBTC token. But just two days after it launched on the mainnet, Thesis founder Matt Luongo announced that the project had been discontinued.

While the discussion about the merits of the project continues – joined by Ethereum co-founder, Vitalik Buterin – and the project itself has been confronted critical, the teams’ reaction to the crisis is not. Luongo, whose Twitter account appears to be the main communication point for this project, said that when the problem was discovered early, the red lever was pulled to stop further problems, deposits were suspended for ten days, and users were helped with emptying funds. (Luongo had not responded to our request for comment on May 18.)

On May 20, Luongo announced that the team was publishing an incident analysis (on Keep’s Medium channel it does (To keep is a privacy layer for public blockchains from Thesis)). It explains that there was a problem with the Bitcoin script that supported certain BTC addressees, which led to an issue in “the redemption flow of deposit contracts putting open deposit signer bonds at risk of liquidation”. They then provided a detailed explanation, technical description, bug fix, incident timeline, steps taken and steps to take.

On May 22, Thesis published an update, saying that the funds have been safely repaid, that they are moving into a release candidate strategy and outlining steps that will lead to the relaunch of tBTC.

Dealing with crisis entails situations

“In a crisis communication situation like this, regular, up-to-date and constant communication with customers is vital,” said Samantha Yap founder and CEO of PR firm with a focus on fintech, blockchain and cryptocurrency startups YAP Global, said Cryptonews.com on how to deal with the crisis in general. She said:

  1. A data breach is a serious problem whether money is compromised or not; affected customers must be notified immediately and immediately.
  2. The company must acknowledge the situation and its seriousness when it occurs, and demonstrate that they take the matter seriously.
  3. While there may be security reasons to wait several days to reveal a data breach to the public, the company must still explain why there is a delay and how they are dealing with the breach, or risk compromising trust, and customers will question the security of their data and funds.
  4. The company needs to reassure its customers and community that they are doing everything they can to fix the problem, which will help build a little bit more undermined trust.

“When these crises occur (and occur frequently), it is always easy to look back and reflect on what would have happened if the communication actions taken had been different,” said Angus Campbell, director of Nominis, a specialized agency for business and financial communication. “By not taking action or acting late, such events always raise more questions about suitability and generally a poor outcome than if a company responded quickly to communications with outside stakeholders.”

Lack of a proper response will negatively impact an organization’s reputation, “said Campbell,” and people will start asking if they are not good enough to deal with the consequences of a crisis, are they good enough to protect my business? to have? ”

“This is why crisis preparedness is so important. Every company must have a crisis communication action plan and the golden rule is above all to communicate at the first available moment. This means that you are proactive in your actions and responses and act in all the interests of your stakeholders, who can help tremendously in the aftermath, ‘he emphasized.

In both cases, it seems that not all crypto companies learn from the mistakes of others. Last year a large crypto company Coinbase was also criticized for their actions and lack of communication during the Neutrino crisis that led to a social media campaign using the hashtag #DeleteCoinbase.

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