The collapse of the COAI token in 2025 resulted in a $116.8 million loss for C3.ai, highlighting significant systemic risks within decentralized finance (DeFi). The incident was driven by unstable leadership, regulatory uncertainties, and technical flaws in algorithmic stablecoins such as xUSD and deUSD. This event underscores the critical need for enhanced due diligence and risk management practices in the crypto industry. Experts stress the importance of four key risk management pillars: financial transparency, technical security, team legitimacy, and regulatory compliance. The COAI scandal has notably shaken investor confidence, particularly in algorithmic stablecoins and DeFi protocols. Despite a 40% reduction in scam inflows since 2023, fraud tactics have become increasingly sophisticated, with illegal crypto activities still posing a $45 billion challenge. To restore trust, the industry is urged to implement proactive risk management strategies, including standardized due diligence, diversification, and real-time monitoring tools.