Crypto.com Faces Backlash Over Reissuing 70B Burnt Cronos Tokens

Crypto.com is under fire for reissuing 70 billion Cronos (CRO) tokens, despite its 2021 commitment that they were permanently burned—raising serious concerns about transparency and financial integrity.

Critics argue that this move contradicts the core principles of decentralisation and trust in the crypto ecosystem.

Adding to the controversy, Crypto.com’s recent partnership with Trump Media & Technology Group (TMTG) has intensified scrutiny, fuelling further debate over its motives and commitment to ethical governance.

Blockchain Sleuth ZachXBT Calls Out Crypto.com, Gets Blocked by Its CEO

The controversy heated up on 25 March when on-chain investigator ZachXBT accused Crypto.com of reissuing Cronos tokens previously declared permanently removed from circulation.

The allegations surfaced shortly after Trump Media announced a non-binding agreement with Crypto.com to launch US crypto exchange-traded funds (ETFs) through its broker-dealer, Foris Capital US.

This unexpected partnership has sparked scepticism, with ZachXBT arguing that Truth Media would be better suited to collaborate with established exchanges like Coinbase, Gemini, or Kraken rather than Crypto.com.

Community Outrage Over CRO Tokens Burnt Reversal

The revelation that Crypto.com reissued 70 billion CRO tokens—previously declared permanently burned—has ignited widespread outrage in the crypto community.

Investors who believed the burn was final now accuse the exchange of manipulating tokenomics for financial gain.

The abrupt increase in circulating supply risks devaluing existing tokens, contradicting the original deflationary promise that aimed to boost CRO’s value and investor confidence.

Blockchain records confirm the tokens’ reinstatement, deepening scepticism about Crypto.com’s credibility.

A report from Unchained Crypto highlights that token burns are often misleading, as developers retain control over smart contracts, enabling them to reverse burns at will—an unsettling reality now exemplified by Crypto.com’s actions.

Crypto commentator Gem Insider concurred with ZachXBT.

Adding to the controversy, allegations suggest CEO Kris Marszalek leveraged his influence to secure a partnership with Truth Social’s parent company, TMTG.

User Solionxbt also commented on X (formerly known as Twitter).

The timing raised eyebrows, as TMTG’s stock surged 9% after announcing a non-binding agreement with Crypto.com to launch a Cronos ETF—despite reporting a staggering $400 million loss in 2024.

Critics argue this raises ethical concerns about the deal’s legitimacy.

Crypto.com has yet to provide a formal explanation, further fuelling distrust.

Analysts warn that the reissuance could set the stage for a “pump and dump” scheme, artificially inflating CRO’s price ahead of future announcements.

As scrutiny intensifies, market observers urge caution, awaiting clarity from the exchange.

Cronos’ Price Rallied Despite Controversy

Despite the ongoing controversy, Cronos (CRO) has surged 13.21% in the past 24 hours and 38.74% over the last week, now trading at $0.1074, according to CoinMarketCap.

While the price spike followed the partnership announcement, experts remain divided on CRO’s future.

Some warn that the token reissuance scandal could trigger stricter regulations and hinder long-term growth.

Others argue that anticipation of a potential CRO ETF could drive short-term interest.

Price predictions vary, with some analysts expecting stabilisation around $0.10, while others speculate a rally toward $1.

Crypto.com CEO Claims This Move is What The Community Wants

Crypto.com CEO Kris Marszalek defended the decision, stating it was essential to foster investment growth amidst shifting political dynamics in the US.

Marszalek emphasized during a March 25 AMA on X:

“Cronos and Crypto.com have been running separately for years.”

He added:

“The original token burn from Q1 2021 was a defensive move. At that point in time, it made a lot of sense. Now we have strong support from the new administration, the war on crypto is over […] There’s a need for an aggressive investment to win.”

He claimed:

“This is what the community wants, it’s like thinking cents when we should be thinking dollars.”

Governance and Decentralisation Under Scrutiny

Critics have raised concerns that the voting process behind the reissuance of the 70 billion CRO tokens may have been manipulated.

On 19 March, GitHub users claimed that Crypto.com’s validators control up to 70% of the blockchain’s voting power, enabling them to override community decisions.

Sources from Laura Shin’s Unchained suggest that Crypto.com may control between 70% and 80% of the voting power, effectively rendering governance votes inconsequential.

In response, Marszalek took to X to emphasize the company’s financial stability and regulatory compliance amid the controversy surrounding the reissuance.

This move comes after Crypto.com’s 2021 blog post—since deleted—highlighted the 70-billion-CRO burn as the "largest token burn in history," designed to "fully decentralise the network" during the CRO mainnet launch.

Announcing an immediate burn of 59.6 billion tokens, the blog post stated:

“Aligned with our belief, and with the CRO chain mainnet launch just around the corner, we are fully decentralizing the chain network.”

Users questioned the move nonetheless.

Is the Future of Cronos Bleak or Will It Pull Through the Controversy?

As Crypto.com and Trump Media push forward with their partnership, concerns surrounding Cronos continue to grow within the industry.

The platform’s ability to regain user trust will be pivotal in determining whether CRO can maintain its recent surge.

This controversy highlights the critical need for transparency and accountability in digital finance.

Many analysts now advocate for stricter regulations to safeguard investors.

The incident serves as a stark reminder of the risks inherent in the digital asset ecosystem.

While the potential for a CRO-focused ETF excites traders, it also introduces significant uncertainty.

The ongoing supply manipulation debate raises caution, underscoring the rapid evolution of the industry.

As such, market participants are closely following analysts' price predictions for CRO to guide their decisions.