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Crypto.com is facing criticism from the crypto community after reissuing 70 billion Cronos tokens burned in 2021. Critics said the move undermines the principles of decentralization and transparency in the cryptocurrency space.
The controversy erupted on March 25 after onchain investigator ZachXBT posted on X, accusing Crypto.com of reissuing Cronos (CRO) tokens that had been declared permanently removed from circulation. “CRO is no different from a scam,” ZachXBT said, claiming the reissued amount represented 70% of the total supply and contradicted the community’s expectations.
“Your team just reissued 70B CRO a week ago that was previously burned ‘forever’ in 2021 (70% total supply) and went against the community wishes as you control majority of the supply,” he added.
The reissuance followed news that Trump Media had signed a non-binding agreement with Crypto.com to launch US crypto exchange-traded funds (ETFs) through Crypto.com’s broker-dealer, Foris Capital US.
“Unsure why Truth would choose a partnership with your exchange over Coinbase, Kraken, Gemini, etc, after this move by your team,” ZachXBT added.
Suddenly increasing a token’s circulating supply may dilute the value of existing tokens, leading to a price decrease due to supply and demand mechanics.
Crypto.com CEO responds to backlash
In response, Crypto.com CEO Kris Marszalek said the move was necessary to support investment growth under the new political climate in the US. “Cronos and Crypto.com have been running separately for years,” Marszalek said during a March 25 AMA on X, adding:
“This is what the community wants, it’s like thinking cents when we should be thinking dollars,” he added.
Related: Bitcoin ‘more likely’ to hit $110K before $76.5K — Arthur Hayes
Concerns about governance and decentralization
Critics have also raised concerns that the voting process allowing the reissuance may have been manipulated.
On March 19, Cointelegraph reported that GitHub users claimed the exchange’s validators control up to 70% of the voting power on the blockchain, giving them the ability to overturn community votes.
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.
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 token re-issuance.
Related: Michael Saylor’s Strategy surpasses 500,000 Bitcoin with latest purchase
Crypto.com originally disclosed the 70-billion-CRO token burn in a now-deleted February 2021 blog post, referring to it as the “largest token burn in history” with a goal to “fully decentralize the network” at the CRO mainnet launch.
A screenshot from a now-deleted Crypto.com blog post on the 70-billion-CRO token burn. Source: Archive.today
“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 stated, announcing an immediate burn of 59.6 billion tokens.
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