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Major cryptocurrency exchange Crypto.com came under fire following an allegedly manipulated vote leading to a massive token burn reversal on Crypto.com’s Cronos blockchain.
Crypto.com CEO Kris Marszalek took to X on March 19 to highlight the firm’s financial and regulatory stability amid the ongoing controversy over the 70 billion Cronos (CRO) token re-issuance.
Essentially canceling the 70 billion CRO token burn announced in 2021, the vote on bringing back the tokens has triggered outrage from the community, with many commentators criticizing the CEO for not addressing the issue in his new thread on X.
“So you made $1 billion profit but needed to mine 70 billion CRO instead of using those funds to buy some off the market and help your core community remain positive,” one commentator wrote.
Source: Crypto.com CEO Kris Marszalek
“The largest token burn in history”
In February 2021, a now-deleted Crypto.com post disclosed in February 2021 in a now-deleted post on the Crypto.com blog that the 70 billion CRO token burn was called the “largest token burn in history” with a goal to “fully decentralize the network” at the CRO mainnet launch.
“Aligned with our belief, and with the CRO chain mainnet launch just around the corner, we are fully decentralizing the chain network,” the blog post said, announcing an immediate burn of 59.6 billion tokens.
A screenshot from a now-deleted Crypto.com blog post on the 70 billion CRO token burn. Source: Archive.today
Following the immediate 59.6 billion CRO burn, 0.4 billion of the remaining tokens were directed to monthly burns, while another 5.9 billion CRO was sent to block rewards, and 0.9 billion CRO was allocated to Particle B for chain ecosystem development.
Why reverse the burn?
In four years following the burn, a Cronos blog post on March 2 announced a vote on the creation of a Cronos Strategic Reserve by reversing the 2021 token burn.
“In 2021, 70 billion CRO were burnt in one of the most significant burn transactions in history. Under today’s proposal, an equal number of tokens will be re-issued on Cronos POS into a Cronos Strategic Reserve escrow wallet, bringing the total supply back to the initial supply of 100 billion CRO,” the announcement said.
An excerpt from Cronos’ vote proposal on reversing the 2021 CRO token burn. Source: Cronos
Launched on March 3, the vote received lots of negative feedback from the community on social media, with many posters urging that the CRO re-issuance was the “opposite of what this community wants.”
Related: Binance announces community voting mechanism for token listings
“I hope that people vote against this, this is a terrible idea,” one commenter said.
Last-minute voters approved re-issuance
Despite notable community backlash, the vote results came in favor of a Cronos Strategic Reserve, spurring controversy and speculation over alleged vote manipulation.
“Totally manipulation to come in at the last minute and vote yes, the CDC [crypto dot com] is as centralized as a blockchain can be, and shouldn’t be since there’s no real governance when 70% of the voting power is in the CDC,” one GitHub commentator wrote.
According to Laura Shin’s Unchained sources, Crypto.com allegedly controls 70-80% of the total voting power, essentially removing the need for any governance vote at all.
Following the massive backlash, Crypto.com announced an ask-me-anything event coming on March 25, with the CRO token burn apparently becoming the main issue on the agenda.
“Looking forward to catching up with our community on Tuesday,” Crypto.com CEO said in a March 19 post on X, adding the hashtag “MakeCROGreatAgain.”
Cointelegraph approached Crypto.com for a comment regarding the burn reversal but did not receive a response at the time of publication.
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