Crypto.com faces backlash over alleged vote manipulation in 70B CRO token burn reversal

Crypto exchange Crypto.com faced criticism for allegedly manipulating a vote that resulted in a 70 billion token burn reversal on the Cronos blockchain.

However, the 70 billion Cronos tokens re-issued on the blockchain were initially burned in 2021, and at the time, they touted it as the “largest token burn in history.”

Crypto.com said it wanted to return its CRO supply to the original 100 billion

On March 2, the platform announced a vote on the development of the Cronos Strategic Reserve, hoping to reverse the 2021 token burn.

Back in February 2021, the crypto exchange had planned to decentralize the network fully at the CRO mainnet launch, recognizing the burn as the largest one yet, with 70 billion CRO tokens involved.

At the time, 59.6 billion tokens were burned first, with the remaining 0.4 billion tokens allocated to monthly burns, 5.9 billion directed to block rewards, and 0.9 billion tokens dedicated to ecosystem development. 

However, just recently, the platform stated that it wanted to spring back its total supply to the original 100 billion CRO, justifying the need for a token reversal and a community vote on the matter.

Nonetheless, by March 3, crypto community members were already against the idea of a vote, arguing that a CRO re-issuance was not what they really wanted or needed. One commenter even hoped that many people would vote against the re-issuance.

However, the final vote results were in favor of the Cronos Strategic Reserve, brewing even more backlash and controversy over the exchange’s alleged vote manipulation.

CEO Kris Marszalek announced that the company made about $1 billion in gross profit

Multiple crypto community members have already accused the exchange of manipulating the voting process to approve the re-issuance.

Some even claimed that the platform controlled 70-80% of the total voting power, eliminating the need for any governance vote.

In a March 19 post, CEO Kris Marszalek tried to assure users of the platform’s financial and regulatory stability after the accusations surfaced. 

He commented, “The business is run in a very efficient way; after salaries and other opex, we have about $1b in gross profit to reinvest in the growth of the platform. Of that, user acquisition, user incentives, and branding cost us about $700m last year, leaving us with a net profit of $300m from operations.”

However, he did not directly address community concerns about the token burn reversal. 

Responding to Marszalex’s post, one commentator even criticized the exchange for making the $1 billion profit instead of using the tokens to buy tokens off the market and support their core community. 

Nevertheless, following the continued backlash, the platform has called for an ask-me-anything event on March 25 to address the CRO token issue.

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