06 — Partner / Counterparty Failure

Trigger: A material partner, counterparty, vendor, or integration is hacked, becomes insolvent, is indicted, sanctioned, delisted, or otherwise compromised — and the relationship is publicly known or material to your operations.

First 30 minutes

Partner blow-ups are guilt-by-association events. Your operational exposure is usually small; your reputation exposure is usually large. The asymmetry shapes the response.

Confirm the partner event. What exactly happened to them? Hack? Insolvency? Indictment? Each shapes your response differently.
Open the hotline. “Partner event: [partner name], [event type], confirmed: [yes/no], our exposure: [operational / reputational / both / neither].”
Quantify operational exposure immediately. Do you hold their tokens? Do they custody anything for you? Are you their integrator? Are they yours? Are user funds on your platform exposed via the partnership? Engineering and treasury answer; comms cannot draft until this is known.
Identify reputational exposure. Where is this partnership publicly listed? Logo on your homepage? Joint announcements? Co-marketing campaigns? Partner appears in your fundraising deck? List everywhere it shows up.
Convene the war room. Treasury, eng (for integrations), comms, counsel.
Decide on operational containment. Pause integrations? De-list? Pull joint marketing? Each has its own communications implication.
Decide on the public posture before publishing anything. There are three options: ahead of the story (proactive), with the story (statement when reporters ask), behind the story (silent until forced to comment). All three are sometimes correct depending on exposure.

Holding statement template — material exposure

When you have direct operational exposure to the failed partner:

[TIMESTAMP — UTC]
      
      [COMPANY] is aware of [REPORTS / EVENTS] concerning [PARTNER NAME].
      
      Our exposure is as follows: [SPECIFIC FACTUAL DESCRIPTION — e.g., "Approximately [X]% of
      [ASSET CATEGORY] custodied via [PARTNER]. Withdrawals of these assets are temporarily paused
      pending [PARTNER]'s response to events."]
      
      [USER FUNDS DIRECTLY HELD BY US / TREASURY POSITIONS / OTHER SERVICES] [ARE / ARE NOT]
      affected.
      
      We are working to [SPECIFIC ACTION — e.g., "recover assets through standard counterparty
      processes", "transition affected services to alternate providers"]. We will publish a fuller
      update at [SPECIFIC TIME].
      
      — [Company / Team]

Holding statement template — minor exposure

When the partnership is publicly visible but operationally minor:

[TIMESTAMP — UTC]
      
      [COMPANY] is aware of [REPORTS / EVENTS] concerning [PARTNER NAME].
      
      [COMPANY]'s [PRODUCT / OPERATIONS / USER FUNDS] are not directly affected. [PARTNER NAME]
      [INTEGRATION / RELATIONSHIP] [HAS BEEN / IS BEING] [PAUSED / WOUND DOWN / REVIEWED] as a
      precautionary measure.
      
      [OPTIONAL: BRIEF FACTUAL DESCRIPTION OF THE NATURE AND SCOPE OF THE PARTNERSHIP — only if
      required to dispel exaggeration].
      
      — [Company / Team]

Holding statement template — no operational exposure

When there’s only reputational exposure and the partnership is largely promotional:

Often: no public statement, just quietly remove logos and joint references from your marketing surfaces. If reporters ask, the line is “[Partner] was a [SPECIFIC LIMITED ROLE] partner. The relationship has been [reviewed / wound down / paused]. We do not have ongoing operational exposure.”

Stakeholder cascade

#	Audience	Channel	Who	Goal
1	Internal team	Slack #incident	CEO/COO	Picture
2	Major customers (if integration affects them)	1:1 + email	BD/Customer success	Continuity
3	Other partners (especially competitive ones)	Pre-empt	BD lead	Don’t have them learn from press
4	Regulator (if relevant)	Per protocol	Compliance + counsel	Required disclosure
5	Press	Either proactive or reactive depending on exposure	Comms with counsel	Frame the story
6	Public — statement (if material)	X + blog	Comms lead	Settle narrative
7	Community	Discord / Telegram	Community lead	Detail and reassurance

Do

Be specific about the relationship. Vagueness invites speculation. “[Partner] provided [exact service] for [exact scope]” is more credible than “[Partner] was a partner of ours.”
Quantify your exposure publicly. “Less than 0.3% of treasury was held in [token]. The position has been exited.” Numbers are reassuring; vagueness isn’t.
Pull joint marketing assets quickly. Logos on your website, press releases, deck slides, video testimonials — anywhere the partner is visible needs review within 24 hours.
Distinguish your operational risk model from the partner’s. “[Partner]’s situation reflects [SPECIFIC RISK FACTOR]; our [STRUCTURE] does not have this exposure.” Without naming, but clearly differentiating.
Update on a schedule. Partner blow-ups have long tails — weeks, not days.

Don’t

Don’t pile on the partner publicly. Even if the partner is unambiguously at fault, public criticism reads as opportunistic and damages your reputation more than theirs.
Don’t hide a real exposure. It will leak. Better to disclose with quantification than be discovered hiding.
Don’t claim “we always knew” about the partner’s problem. Smug, undignified, and rarely defensible.
Don’t ignore historical joint marketing. Old press releases on your blog from three years ago will be screenshotted. Take them down or annotate them.
Don’t try to spin. Crypto Twitter has a long memory and forensic capacity. Spin will be caught and amplified.

Variants

Partner is hacked. Cross-reference 01 — Hack. Your statement focuses on whether your-side funds are affected via the partnership.

Partner becomes insolvent. Operational risk: are funds custodied with them recoverable? Communication risk: distance from the model that failed. “Our reserves are held in [different structure]”.

Partner is sanctioned. Often legally requires immediate cessation of the relationship. Counsel-driven; statement framed as “compliance with applicable sanctions”, not as a moral position.

Partner is publicly accused (not yet indicted). Hardest variant — accusations may or may not be substantiated. Counsel decides whether to pause the relationship pending investigation. Public statement uses “reviewing the relationship in light of public reports” language.

Partner appears in your fundraising deck or investor materials. When the partner is materially featured in investor-facing materials, an investor-facing follow-up is needed even if no public statement is issued.

24-hour follow-up

Audit all marketing, integration, and operational touchpoints with the partner. Document what’s pulled and what’s retained.
Decide on a long-term posture: full wind-down, paused-with-review, full continuation. Document the reasoning; investors and regulators will ask.
Brief the team on internal lessons. Partner due-diligence often comes under question after a partner blow-up; make explicit what changes.
Update the partnership / integration policy if needed.
For licensed entities, document the event and the response in the regulatory file. Future supervisory exams will look at this.

Cross-references: 01 — Hack, 02 — Depeg, 04 — Regulator Letter, 08 — Withdrawal Pause.