Crypto.com has come under fire after it reversed a major token burn on the Cronos blockchain, which was initially announced in 2021 as the “largest token burn in history.”
Crypto.com has come under fire after it reversed a major token burn on the Cronos blockchain, which was initially announced in 2021 as the “largest token burn in history.” The company planned to burn 70 billion CRO tokens to decentralize the network but recently proposed to reissue these tokens, bringing the total supply back to 100 billion. This has led to widespread criticism and accusations of vote manipulation within the crypto community.
The proposal, introduced on March 2, suggested the creation of a Cronos Strategic Reserve, which would reverse the token burn. The idea was met with backlash on social media, with many crypto users condemning the decision. Despite the vocal opposition, the vote passed, with Crypto.com-linked validators controlling 70% of the voting power, effectively ensuring the proposal’s approval. Independent validators, who largely opposed the reversal, were unable to influence the outcome due to Crypto.com’s dominance in the network’s governance.
Many in the community have expressed concerns about the centralization of power in the hands of Crypto.com, as it controls a large portion of the voting power. This has led to fears of an unfair governance process, with some accusing the company of manipulating the vote to suit its interests. The re-issuance of tokens has also raised doubts about the company’s commitment to decentralization, a key feature many blockchain projects strive for.
CEO Kris Marszalek responded to the backlash on March 19 by emphasizing Crypto.com’s financial stability and regulatory compliance, citing the company’s $1 billion in gross profits from the previous year. However, he did not directly address the issue of the token burn reversal. This silence on the matter led some community members to question why, with the company’s substantial profits, Crypto.com did not buy tokens off the market instead of re-issuing billions of new CRO tokens.
The reversal has also impacted CRO’s market performance. The token’s price has fallen 8% this week, dropping to around $0.079, far below its peak value of $0.9698 in November 2021. The decision has sparked fears that the token’s value will continue to decline as a result of the increased supply.
Crypto.com has scheduled an AMA for March 25, where it is expected to address these concerns and provide more clarity on the decision. While the company insists that the move is in the best interest of the network’s long-term growth, the reversal of the token burn has raised serious questions about its governance practices and its ability to maintain decentralization.
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