Crypto.com announces partnership with Trump Media & Technology Group to launch exchange-traded funds.

But backlash in the crypto industry has been swift. That's because the crypto exchange and its subsidiary Cronos Labs also said they will reissue some $7 billion worth of their native Cronos tokens that were burned in 2020.

Trump Media & Technology Group, US President Donald Trump’s media company, is partnering with cryptocurrency exchange Crypto.com to launch exchange-traded funds.

The partnership will see the two companies launch a series of single-stock ETFs that will be listed on the Cronos exchange, a subsidiary of Crypto.com. The ETFs will track the prices of some of America’s most-traded stocks, such as Apple, Google, and Microsoft.

The move is part of a broader effort by Crypto.com to expand its product offerings and become a leading player in the Web3 space. The exchange is also planning to launch a new DeFi platform and a decentralized autonomous organization (DAO).

“We are excited to partner with Trump Media & Technology Group to bring this innovative product to market,” said Ben Armstrong, ambassador at Cronos Labs. “We believe that ETFs are a natural evolution of the cryptocurrency industry, and we are committed to providing our users with the best possible products and services.”

The partnership is sure to generate interest in both Trump Media and Cronos. Trump Media’s stock price has soared in recent months, while Cronos has been a popular choice for DeFi investors.

However, the partnership has already faced criticism from members of the crypto community. Some have expressed concern over the timing of the move, given that Cronos tokens were burned in 2021 as part of a deflationary effort to improve value.

The tokens are now being resurrected, and critics say the move erodes faith in the project.

“This isn’t just about Cronos, it’s about trust in blockchain. If one chain reverses token burns, where does it end?” Chief operating officer at blockchain gaming outfit Kepithor Studios Sam Grilli posted.

Other critics questioned the role of whales in swaying the governance vote last week.

In an announcement about the vote to reverse the token burn, community members were told of a “bold plan” to support Cronos and its ETF as part of “America’s ambition to become the world capital of crypto.”

The reissued tokens will be set aside in a so-called strategic reserve to support Cronos’ roadmap, which includes the ETF deal. The tokens will swell the Cronos supply to 100 billion coins, ultimately valued at $10 billion.

Critics were quick to jump on the link between the vote and the Trump Media announcement on Monday.

Neither Crypto.com nor Trump Media responded to requests for comment.

A US president’s business endeavours raise conflict of interest concerns. The controversy also exposes deep fault lines in crypto, especially in the outsized influence of whales in corporate governance.

Almost 80% of the wallets that participated in the vote were against the proposed token recovery. However, they only controlled 20% of the voting power.

This week’s backlash isn’t the first time Crypto.com has drawn controversy. In 2020, Crypto.com fielded criticism from investors who were forced to swap the exchange’s former token MCO for Cronos. At the time, token holders deemed the swap unfavourable.

Cronos is up 22% on Tuesday, but it’s still down 90% from its peak price of $0.96, which was reached in 2021. Trump Media shares rose almost 9% in New York trading.