While compliance is crucial for preventing criminal activity and ensuring market fairness, it doesn’t guarantee a project’s survival. This article explores why crypto projects must adopt a proactive approach to risk management beyond mere regulatory adherence. 2024 data reveals that regulated exchanges suffered double the losses compared to decentralized protocols, highlighting how operational failures and technical flaws can lead to substantial financial devastation. This underscores the need for self-regulation based on measurable metrics like Probability of Loss (PoL). This framework offers a common language for assessing risk: investors can determine project capability based on actual probability of failure, institutions gain accurate risk insights, and regulators receive real-time data, moving beyond traditional licensing and audits.