Crypto.com Reissues 70 Billion CRO Tokens, Sparking Community Outrage

Crypto.com has come under fire from the cryptocurrency community following the reissuance of 70 billion Cronos (CRO) tokens that were previously burned in 2021. The controversy began on March 25 when onchain investigator ZachXBT posted on X, accusing Crypto.com of reissuing tokens that had been declared permanently removed from circulation. ZachXBT claimed that the reissued amount represented 70% of the total supply, contradicting community expectations and undermining the principles of decentralization and transparency in the cryptocurrency space.

ZachXBT's post highlighted the potential impact of the reissuance on the value of existing tokens, noting that suddenly increasing a token’s circulating supply may dilute its value, leading to a price decrease due to supply and demand mechanics. 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. ZachXBT questioned the rationale behind the partnership, given the recent actions by Crypto.com.

In response to the backlash, Crypto.com CEO Kris Marszalek defended the move, stating that it was necessary to support investment growth under the new political climate in the US. During a March 25 AMA on X, Marszalek explained that the original token burn from Q1 2021 was a defensive move, but now there is strong support from the new administration, and the war on crypto is over. He emphasized the need for aggressive investment to win, suggesting that the community should think in terms of dollars rather than cents.

Critics have also raised concerns about the governance and decentralization of the Cronos network. It has been alleged that the voting process allowing the reissuance may have been manipulated, with Crypto.com's validators controlling up to 70% of the voting power on the blockchain. This control gives them the ability to overturn community votes, 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.

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. The blog post announced an immediate burn of 59.6 billion tokens, aligning with the belief in fully decentralizing the chain network. The recent reissuance of these tokens has raised questions about the transparency and decentralization of the Cronos network, with critics arguing that the move contradicts the original goals of the token burn.