Outgoing links can damage your business. Real-life case.

A big drop in website traffic is a good reason to thoroughly check your site, especially if it happened on its own and not due to any changes you made. However, I strongly recommend checking the outbound links from your site first.
This is a real-life case I came across while crawling a site to find expired domains. I have been developing a service that identifies available domains from well-known, high-traffic websites. These domains can then be used for new projects, SEO, or resale.
To test a new feature, I crawled a website with approximately 185,000 monthly visitors. The site focused on digital topics, but as I analyzed the list of found domains, I noticed something alarming—many of them had high domain ratings but contained keywords related to the adult industry.
I looked at the website pages where suspicious links were placed and understood what happened to the website.
It was hacked by a bot, which automatically has been creating user profiles and allowing websites to be added to the profile information. As a result, some adult sites have received strong backlinks from a trusted resource, and the bot has created hundreds of them – several hundred outgoing links to adult sites.
The owner didn’t understand that these were penalties from search engines, which caused a drop in search results. If a website's ranking is falling, it means the business is going down too.
Google’s spam detection systems can automatically devalue sites with suspicious outbound links. Your site might see ranking drops or reduced visibility in search results.
Never associate yourself with a website that is doing something ethically or legally dubious.
Hacking, porn and malware-ridden sites should be avoided.
Also, try to remove links to other sites that have been penalized in the past, assuming you know about it.