Crypto.com has sparked controversy by approving the minting of 70 billion CRO tokens, worth approximately $5 billion. The move has raised concerns about financial stability, with critics questioning the exchange’s transparency and long-term strategy.
A U-Turn on the 2021 Token Burn
The decision to mint new CRO tokens reverses a 2021 token burn, which was initially framed as a way to boost CRO’s value. Despite opposition from independent validators, Crypto.com’s control over voting power ensured the proposal’s approval.
The market reacted negatively, with CRO’s price dropping 5.2% to $0.077. Many investors now fear that the exchange could be facing liquidity issues, despite its claims of financial strength.
Transparency Concerns and CEO Controversy
Crypto.com’s reluctance to release updated audits has further fuelled distrust. The exchange has not published an audited financial statement since 2022, leaving investors in the dark about its true financial health.
Adding to the skepticism, CEO Kris Marszalek’s past business controversies—including the collapse of Ensogo in 2016—have resurfaced. Critics argue that the lack of oversight and historical red flags only deepen concerns about Crypto.com’s financial position.
Proof-of-Reserves: Not Enough to Restore Trust?
While Crypto.com did release a proof-of-reserves report in 2022, auditing firm Mazars later distanced itself from the assessment, raising doubts about its credibility. Without a comprehensive third-party audit, many believe the exchange is failing to provide sufficient financial clarity.
Crypto.com, however, maintains that it operates under strict regulatory oversight and insists that the new tokens will support ecosystem growth. Yet, without clear details on how the funds will be used, skepticism remains high.
Can Crypto.com Rebuild Confidence?
Until Crypto.com discloses its financial health and the purpose of the newly minted CRO, restoring trust within the crypto community will be difficult. The exchange must address investor concerns and commit to greater transparency—or risk further erosion of confidence in its platform.
