Crypto.com is facing mounting backlash from the cryptocurrency community after a controversial decision to reissue 70 billion Cronos (CRO) tokens that were previously burned in 2021.
On March 25, prominent blockchain investigator ZachXBT took to X, accusing the exchange of essentially betraying its community by resurrecting the tokens, which represented 70% of the total supply.
ZachXBT tweeted,
“CRO is no different from a scam.”
He argued that the move directly contradicted the initial promise of a “permanent” burn, a step taken in 2021 to reduce the token’s circulating supply. This decision, he claimed, went against the wishes of the community, which has long voiced concerns about centralized control over CRO’s supply.
The controversy follows a major partnership announcement between Crypto.com and Trump Media. The two parties are exploring a non-binding agreement to launch US crypto exchange-traded funds (ETFs) through Crypto.com’s broker-dealer, Foris Capital US.
Crypto.com Defends CRO Token Re-issuance
Following the intense criticism, Crypto.com CEO Kris Marszalek defended the re-issuance and explained during a March 25 AMA that the initial token burn in 2021 was a defensive move amid a hostile regulatory environment.
Marszalek stated that, with the “war on crypto” now over under the new US administration, Crypto.com needed to adopt a more “aggressive” approach to foster growth.
He also went on to highlight that the re-issuance was necessary to support the company’s investment plans and further dismissed the concerns, arguing that this was what the community wanted and needed to compete on a global scale.
“The original token burn from Q1 2021 was a defensive move. At that point in time, it made a lot of sense. Now we have strong support from the new administration, the war on crypto is over. There’s a need for an aggressive investment to win. I am always very supportive of thinking big, of being bold.”
Debate Over Centralized Control and Transparency
The move has raised additional governance concerns, with a report by Unchained suggesting that Crypto.com’s validators control up to 70% of the voting power on the blockchain. The report also pointed out that despite most token holders opposing the proposal, two major voters, Falcon Heavy and Starship – both allegedly controlled by Crypto.com – exercised significant influence due to their large CRO holdings.
The proposal passed with 62.18% in favor, 17.61% against, and over 20% abstaining. This has cast doubt on the fairness of the decision-making process.
Critics argue that this concentration of power undermines decentralization and transparency, two key principles that are crucial to the ethos of the cryptocurrency industry.
