Crypto.com has ignited controversy within its community after proposing to re-mint 70 billion CRO tokens. This decision marks the reversal of a 2021 token burn intended to reduce the circulating supply permanently.
The move, which passed at the last minute with a decisive vote, has left many CRO holders feeling betrayed.
The outcome remained uncertain for most of the proposal’s voting period, which ran from March 2 to March 16. While the “yes” votes narrowly led, the proposal did not pass the 33.4% quorum of eligible votes.
That changed on Sunday at 14:00 UTC when a sudden influx of 3.35 billion CRO tokens tipped the balance. This secured the necessary quorum and significantly boosted the “yes” votes. Notably, voter turnout was 70.58%, exceeding the required threshold. The final tally was 62.18% in favor, 17.61% against, and 20.11% abstaining.
To put it in perspective, only 11.86% of validators voted “yes,” with only two of its validators (Starship and Falcon Heavy) supporting the proposal initially.
By the end of the vote, three more Crypto.com-controlled validators, Electron, Antares, and Minotaur IV, joined them. Meanwhile, two independent validators, Cosmostation and Polkachu.com, also backed the proposal.
Notwithstanding, their votes had minimal impact on the outcome as Crypto.com controls between 70-80% of the total voting power. This means the company tipped the scales through its dominance over the network.
Community members were quick to express frustration, accusing Crypto.com of manipulating the process. Based on the claims, it appears the Crypto.com exchange leveraged its significant control over the network’s validators. One large token holder voiced their disappointment on Telegram.
“They [Crypto.com] pushed their votes almost at the last minute. And now they created a precedent that other projects could follow,” Unchained reported, citing a community member on Telegram.
With the vote secured, Crypto.com is set to upgrade the Cronos blockchain, re-minting 70 billion CRO tokens. The newly minted supply will vest over five years and serve various purposes, including the potential creation of a CRO ETF (exchange-traded fund).
Notably, the original 70 billion CRO burned in 2021 will remain out of circulation. Nevertheless, the timing and nature of this decision have fueled skepticism within the community, especially given Crypto.com’s prior assurances that the 2021 burn was final.
A day after the controversial re-minting passed, Crypto.com introduced another proposal to burn 50 million CRO tokens. This constitutes about 0.07% of the freshly minted supply and has been met with widespread derision.
“It is a spit in all CRO holders’ faces. I mean, how dare you re-mint 70 billion tokens and on the same day start a proposal for burning 50 million tokens,” crypto journalist Laura Shin revealed, citing one validator who opposed the re-minting proposal on Telegram.
The comment reflects the general sentiment among the Crypto.com community. Many feel that this irreparably damaged their trust in the platform.
Amidst an outraged community and eroded trust in Crypto.com, the fallout from this decision could have long-term repercussions for the company and the broader Cronos ecosystem. Meanwhile, voting on the latest burn proposal continues.
Amidst this backlash, Cronos’ CRO price is down by almost 5%. BeInCrypto data shows CRO was trading for $0.08 as of this writing.
Crypto.com did not immediately respond to BeInCrypto’s request for comment.
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