CRO Controversy: Crypto.com Under Fire for Reissuing 70B Tokens
Crypto.com is facing intense criticism following its decision to reverse a previous token burn, re-issuing 70 billion CRO tokens on its Cronos network.
The move has sparked accusations of centralization and governance manipulation within the cryptocurrency community.
Reversal of the 70 Billion CRO Token Burn
In February 2021, Crypto.com announced what was described as the “largest token burn in history,” eliminating 70 billion CRO tokens from circulation in an effort to decentralize the Cronos network ahead of its mainnet launch. The action was widely praised at the time as a step toward a more decentralized blockchain ecosystem.
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However, nearly four years later, Crypto.com has ignited controversy by reversing the burn. On March 2, a Cronos blog post detailed a proposal to re-issue the 70 billion tokens into a “Cronos Strategic Reserve” escrow wallet, effectively restoring the total CRO supply to its original cap of 100 billion tokens.
The decision faced widespread backlash on social media, with many community members arguing that it contradicted Crypto.com’s original commitment to decentralization. Critics suggested that the re-issuance primarily served to maintain the exchange’s influence over the Cronos blockchain while bolstering its reserves.
Governance Vote Sparks Manipulation Claims
Despite strong opposition, the proposal was ultimately approved, leading to accusations of vote manipulation. Critics claim that Crypto.com’s significant control over the governance process rendered the vote meaningless. According to reports, the exchange holds between 70% and 80% of the total voting power, effectively allowing it to dictate governance outcomes.
A GitHub user voiced their frustration, stating, “Total manipulation to come in at the last minute and vote yes. The CDC [Crypto.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.”
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Concerns over governance centralization are not new in the blockchain space, but the concentration of voting power in Crypto.com’s hands has raised fresh doubts about its commitment to decentralization.
Community Reaction and CEO’s Defense
The backlash has prompted calls for Crypto.com to reconsider its approach. Some argue that instead of minting new tokens, the company should have leveraged its reported $1 billion profit to repurchase CRO from the open market, thereby supporting the community and the token’s value.
Also read: CRO Coin: An In-Depth Overview
One community member questioned the company’s priorities, saying, “So you made a $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?”
In response to the growing criticism, Crypto.com CEO Kris Marszalek defended the firm’s financial position and regulatory compliance but largely avoided addressing the concerns surrounding the token re-issuance. To address the controversy, Crypto.com has scheduled an “Ask Me Anything” (AMA) session on March 25, where the token burn reversal is expected to be the primary topic of discussion.
As the debate continues, many investors and community members remain unconvinced by Crypto.com’s explanations. The company’s next steps will likely determine whether it can regain trust or further deepen skepticism over its governance practices and commitment to decentralization.
