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Crypto.com is under fire from the crypto community after reissuing 70 billion Cronos (CRO) tokens that were previously burned in 2021. Critics argue that this move undermines decentralization and transparency in the cryptocurrency space.
The controversy erupted on March 25 when on-chain investigator ZachXBT posted Crypto.com on X of reviving tokens that were supposed to be permanently removed. He labeled CRO a "scam," stating that the reissued amount accounted for 70% of the total supply, contradicting community expectations.
ZachXBT also attacked Crypto.com, saying, "A week ago, your team reissued 70B CRO, which was previously burned 'forever' in 2021." This goes against community interests as you control the majority of the supply.”
The re-issuance coincided with news that Trump Media had signed a non-binding deal with Crypto.com to launch U.S. crypto ETFs through its broker-dealer, Foris Capital US.
ZachXBT questioned why Trump Media would choose Crypto.com over established exchanges like Coinbase, Kraken, or Gemini after such a move.
The sudden increase in token supply raised concerns about dilution, as a larger circulating supply can lower the token’s value due to supply and demand dynamics.
Crypto.com CEO Addresses Criticism
In response, Crypto.com CEO Kris Marszalek explained that the decision was essential to foster investment growth given the changing political landscape in the US. During a March 25 AMA on X, Marszalek stated, "Cronos and Crypto.com have been operating independently for years." He further clarified,
"The initial token burn in Q1 2021 was a preventative measure that made reasonable at the time. However, with the new administration's strong backing, the battle against crypto is over. Now, there's a need for bold investment to succeed."
"With the new administration's full backing, the battle on crypto is over. There’s now a need for aggressive investment to win,” he said, adding that the decision aligns with what the community wants.
Concerns Over Governance and Decentralization
Critics have also raised concerns about governance, questioning whether the voting process that allowed the re-issuance was manipulated.
On March 19, Cointelegraph reported that GitHub users claimed Crypto.com’s validators control up to 70% of the blockchain’s voting power, potentially allowing them to override community votes. Sources cited by Laura Shin’s Unchained suggested the exchange may control 70%–80% of the total voting power, effectively eliminating the need for governance votes.
Amid the growing controversy, Marszalek emphasized Crypto.com’s financial and regulatory stability on X.
Crypto.com initially disclosed the 70-billion-CRO token burn in a now-deleted February 2021 blog post, describing it as the "largest token burn in history" aimed at decentralizing the network ahead of the CRO mainnet launch. The post announced an instant burn of 59.6 billion tokens and said, "We are fully decentralizing the network with the CRO chain mainnet launch approaching."