Crypto.com is experiencing backlash from the cryptocurrency community following the reissuance of 70 billion Cronos tokens, which had been burned in 2021. Detractors argue that this decision compromises the core values of decentralization and transparency that are crucial to the crypto industry.
The uproar began on March 25 when onchain investigator ZachXBT highlighted the situation on X, accusing Crypto.com of bringing back Cronos (CRO) tokens that were previously stated to be permanently out of circulation. “CRO is no different from a scam,” ZachXBT remarked, asserting that the reintroduced tokens accounted for 70% of the total supply and went against what the community had anticipated.
“You recently reissued 70 billion CRO just a week ago that was said to be burned ‘forever’ in 2021 (70% of the total supply), which contradicts community desires since you control the majority of the supply,” he continued.
This reissuance coincided with reports that Trump Media had entered a non-binding agreement with Crypto.com to launch U.S. crypto exchange-traded funds (ETFs) through Foris Capital US, Crypto.com’s broker-dealer.
“Unsure why Truth would opt for a partnership with your exchange over Coinbase, Kraken, or Gemini after this move by your team,” ZachXBT added.
Increasing the circulating supply of a token so suddenly can dilute the value of existing tokens, potentially leading to a decrease in price due to supply and demand dynamics.
### Response from Crypto.com CEO
In light of the criticism, Crypto.com CEO Kris Marszalek defended the choice, explaining that it was essential to foster investment growth given the new political landscape in the U.S. “Cronos and Crypto.com have been operating independently for several years,” Marszalek stated during a March 25 AMA on X, elaborating:
“The original token burn from Q1 2021 was a defensive tactic. At that time, it made a lot of sense. Now, with strong backing from the new administration, the war on crypto is over… We need to aggressively invest to succeed.”
“This is what the community desires; it’s like thinking in cents when we should be considering dollars,” he added.
### Governance and Decentralization Concerns
Critics have expressed worries that the reissuance may have resulted from a flawed voting process.
On March 19, it was reported that GitHub users indicated the exchange’s validators control nearly 70% of the voting power on the blockchain, enabling them to override community votes.
According to sources from Laura Shin’s Unchained, Crypto.com allegedly controls between 70% and 80% of the total voting power, effectively negating any need for community governance votes.
Marszalek addressed the situation on X on March 19 to emphasize the firm’s financial and regulatory stability amidst the ongoing disputes regarding the reissuance of the 70 billion Cronos tokens.
Crypto.com had originally announced the burning of 70 billion CRO tokens in a now-deleted blog post from February 2021, claiming it to be the “largest token burn in history” with the intention to “fully decentralize the network” at the launch of the CRO mainnet.
“Aligned with our belief, and with the CRO chain mainnet launch fast approaching, we are fully decentralizing the chain network,” the blog post stated, revealing an immediate destruction of 59.6 billion tokens.