Crypto.com Faces Backlash After Reversing 70 Billion CRO Token Burn

Blockchain investigator ZachXBT has called Crypto.com’s CRO token a scam after the platform reversed a 70 billion token burn. The decision has sparked concerns over governance transparency on the Cronos blockchain.

Blockchain investigator ZachXBT has called Crypto.com’s CRO token a scam and expressed surprise over a partnership between the platform and Trump Media.

The investigator’s criticism comes in response to a recent announcement from the exchange’s CEO, Kris Marszalek. Marszalek shared news of a partnership between Crypto.com and Trump Media, the parent company of Truth Social, the media platform founded by President Donald Trump.

In a post on X on March 19, Marszalek highlighted that Crypto.com generated $1.5 billion in revenue in 2024 and currently has over 140 million users on the platform. He added that the business is run in a very efficient way, with about $1 billion in gross profit to reinvest in the growth of the platform after salaries and other opex.

“Unsure why Truth would chose a partnership with your exchange with recent events and fibs from your team about the new chain and community wishes,” ZachXBT stated.

The investigator expressed surprise that despite recent developments, including a disputed vote that led to the reversal of a major token burn on the Cronos blockchain and fibs from your team about the new chain and community wishes, they opted for partnership with a well-known exchange like yours.”

Earlier this week, Crypto.com faced backlash after a disputed vote led to the reversal of a major token burn on its Cronos blockchain. The move sparked concerns over governance transparency on the chain.

In February 2021, Crypto.com performed one of the largest token burns in the cryptocurrency industry, eliminating 70 billion CRO tokens from circulation. The burn, which was part of the company’s strategy to decentralize its network, reduced the total supply of CRO tokens from 100 billion to just 30 billion.

The company immediately burned 59.6 billion CRO tokens, with the remaining 10.4 billion allocated to monthly burns, block rewards, and ecosystem development efforts. This move was also intended to improve the token’s value and make the network more community-driven by reducing the total circulating supply.

Crypto.com’s decision to perform such a large-scale token burn was met with positive reactions at the time, as it signaled the company’s commitment to creating a more decentralized and secure platform.

A “token burn” involves permanently removing tokens from circulation to reduce supply and potentially increase the value of the remaining tokens. However, in some cases, burned tokens can be reissued. This can happen through governance decisions, where the community or governing body votes to reverse the burn, or by creating a strategic reserve where burned tokens are stored and later reintroduced into circulation if needed.

While reissuing burned tokens is technically possible, it often faces community backlash as it can impact tokenomics and investor confidence.