The prominent cryptocurrency platform Crypto.com faced backlash after allegations of a manipulated vote caused a significant reversal of a token burn on its Cronos blockchain.
On March 19, CEO Kris Marszalek took to X to emphasize the company’s financial integrity and regulatory standing amidst the uproar concerning the re-issuance of 70 billion Cronos (CRO) tokens.
This action essentially nullified the previously announced burn of 70 billion CRO tokens from 2021, provoking anger within the community. Many commentators criticized the CEO for sidestepping the controversy in his recent post on X.
“You made a $1 billion profit but opted to re-mint 70 billion CRO instead of using that capital to purchase some off the market and support your core community’s morale,” wrote one concerned observer.
Image shared by Crypto.com CEO Kris Marszalek
“The largest token burn in history”
A post from February 2021, which has since been removed, revealed that the burn of 70 billion CRO tokens was referred to as the “largest token burn in history.” The intent was to “fully decentralize the network” as the CRO mainnet launched.
“In line with our vision, and with the CRO chain mainnet launch approaching, we are decentralizing the chain network entirely,” the announcement indicated, detailing an immediate burn of 59.6 billion tokens.
A screenshot from a deleted blog post on the 70 billion CRO token burn. Source: Archive.today
After the 59.6 billion CRO burn, 0.4 billion of the remaining tokens were assigned to monthly burns, another 5.9 billion were allocated for block rewards, and 0.9 billion were designated for Particle B, aimed at ecosystem development.
Why reverse the burn?
In a blog post on March 2, a vote was announced to establish a Cronos Strategic Reserve by reversing the token burn that took place in 2021.
“In 2021, 70 billion CRO tokens were burned in one of the largest transactions of its kind. This proposal seeks to re-issue an equal number of tokens on the Cronos POS and place them into a Cronos Strategic Reserve escrow wallet, restoring the total supply to the original 100 billion CRO,” the announcement stated.
An excerpt from the proposal regarding the reversal of the 2021 CRO token burn.
The vote, which started on March 3, encountered significant negative reactions on social media, with many users stating that the CRO re-issuance was “the opposite of what this community desires.”
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“I hope people vote against this; it’s a dreadful idea,” a user commented.
Last-minute votes favored re-issuance
Despite the considerable community discontent, the vote ultimately favored the Cronos Strategic Reserve, generating debate and speculation over potential vote manipulation.
“It’s clear there was manipulation to rush in at the last minute and vote yes. The platform is as centralized as a blockchain can be, and there isn’t true governance when 70% of the voting power rests with it,” a GitHub user remarked.
Voting results for CRO governance displayed a 70% approval from the community.
According to sources, the platform allegedly holds 70-80% of the total voting power, which significantly diminishes the effectiveness of any governance vote.
In response to the intense backlash, the platform announced an upcoming ask-me-anything event scheduled for March 25, with the token burn issue prominently featured on the agenda.
“Looking forward to engaging with our community on Tuesday,” the CEO noted in a March 19 post, adding the hashtag “MakeCROGreatAgain.”
Inquiries for comments regarding the burn reversal from the platform went unanswered at the time of this report.
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