Crypto.com is facing criticism from the crypto community after reissuing 70 billion Cronos tokens burned in 2021. Critics said the move undermines the principles of decentralization and transparency in the cryptocurrency space.

The controversy erupted on March 25 after onchain investigator ZachXBT posted on X, accusing Crypto.com of reissuing Cronos (CRO) tokens that had been declared permanently removed from circulation. “CRO is no different from a scam,” ZachXBT said, claiming the reissued amount represented 70% of the total supply and contradicted the community’s expectations.

“Your team just reissued 70B CRO a week ago that was previously burned ‘forever’ in 2021 (70% total supply) and went against the community wishes as you control majority of the supply,” he added.

The reissuance followed news that Trump Media had signed a non-binding agreement with Crypto.com to launch US crypto exchange-traded funds (ETFs) through Crypto.com’s broker-dealer, Foris Capital US.

Source: ZachXBT

“Unsure why Truth would choose a partnership with your exchange over Coinbase, Kraken, Gemini, etc, after this move by your team,” ZachXBT added.

Suddenly increasing a token’s circulating supply may dilute the value of existing tokens, leading to a price decrease due to supply and demand mechanics.

Crypto.com CEO responds to backlash

In response, Crypto.com CEO Kris Marszalek said the move was necessary to support investment growth under the new political climate in the US. “Cronos and Crypto.com have been running separately for years,” Marszalek said during a March 25 AMA on X, adding:

“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.” 

Source: Crypto.com

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

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Concerns about governance and decentralization

Critics have also raised concerns that the voting process allowing the reissuance may have been manipulated.

On March 19, Cointelegraph reported that GitHub users claimed the exchange’s validators control up to 70% of the voting power on the blockchain, giving them the ability to overturn community votes.

According to Laura Shin’s Unchained sources, Crypto.com allegedly controls 70%–80% of the total voting power, essentially removing the need for any governance vote.

Marszalek took to X on March 19 to highlight the firm’s financial and regulatory stability amid the ongoing controversy over the 70 billion Cronos token re-issuance.

Source: Kris Marszalek

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Crypto.com originally disclosed the 70-billion-CRO token burn in a now-deleted February 2021 blog post, referring to it as the “largest token burn in history” with a goal to “fully decentralize the network” at the CRO mainnet launch.

A screenshot from a now-deleted Crypto.com blog post on the 70-billion-CRO token burn. Source: Archive.today

“Aligned with our belief, and with the CRO chain mainnet launch just around the corner, we are fully decentralizing the chain network,” the blog post stated, announcing an immediate burn of 59.6 billion tokens.

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Crypto exchange Binance has suspended a member of its Binance Wallet team, adding it could take further legal action after launching an internal investigation over allegations of insider trading.

The exchange’s crypto wallet business, Binance Wallet, launched an investigation on March 23 after it “received a complaint alleging that one of our staff members engaged in front-running trades using insider information to gain improper profits,” it said in a March 25 X post.

It claimed a preliminary investigation found a Binance Wallet staffer who joined the team last month was suspected of using information from a former position in a business development role at BNB Chain to “front-run” trades of a project token. 

“The employee was aware the project was planning a Token Generation Event (TGE) and anticipated it would generate significant community interest,” Binance Wallet wrote.

It claimed the staffer “used multiple linked wallet addresses to purchase a large volume of the project’s tokens” before it publicly announced the token launch and then, after the announcement, “quickly sold part of his holdings to realize significant profits.”

Binance Wallet accused the staff member of front-running trades based on non-public information gained from a previous role in breach of company policy. 

It added the staff member was “suspended immediately and pending further disciplinary action,” and the company would cooperate with authorities in the relevant jurisdiction to take legal action.

The company did not name the staff member but noted the allegations circulating on X prompted the investigation.

Earlier this week, multiple X users pointed to a former operations manager at BNB Chain — Freddie Ng — whose LinkedIn shows he joined Binance Wallet’s business development team last month.

As noted by X user “py,” one of the wallets that DEX Screener shows has profited $82,400 from the token in question, U DEX Platform (UUU), is a wallet that received UUU tokens from another wallet initially funded by the address “freddieng.bnb” — which Ng had shared on his X account.

A wallet allegedly linked to a Binance staffer sold holdings of a token just minutes after it debuted on March 23 and hit a peak value of $31.5 million. Source: DEX Screener

Binance did not immediately respond to a request for comment. Ng was contacted for comment.

Related: BNB Chain launches $100M liquidity program 

Binance Wallet said it appreciated the public efforts, but it would only reward those who submitted reports to a whistleblowing email “to protect whistleblowers’ interests.”

It said it would hand out $100,000 equally distributed among four anonymous whistleblowers who emailed the exchange.

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Kentucky governor Andy Beshear has signed a measure known as the “Bitcoin Rights” bill, into law, enshrining protections for crypto users, as two other US states’ Bitcoin reserve legislation advanced.

Crypto advocacy group the Satoshi Action Fund said in a March 24 statement to X that House Bill 701 protects the “right to self-custody, run a node, and use of digital assets” without “fear of discrimination.” 

First introduced to the Kentucky House by Rep Adam Bowling on Feb. 19, HB701’s description says it safeguards the right to use digital assets and self-custody wallets and bans local zoning changes that discriminate against crypto mining. 

Source: Satoshi Action Fund

At the same time, the legislation provides guidelines for running a crypto node, excludes crypto mining from money transmitter license requirements, and specifies that mining and staking are not considered offering or selling a security.

The bill passed Kentucky’s House of Representatives on Feb. 28, with all 91 representatives voting in favor, and passed the state Senate on March 13, with all 37 senators voting in favor. It was then signed into law by Beshear on March 24. 

The legislation mirrors similar legislation signed into law by Oklahoma Governor Kevin Stitt in May 2024. 

Kentucky’s Bitcoin Rights bill enshrines protections for crypto users in the state. Source: Kentucky General Assembly

Kentucky has also introduced a bill to establish a Bitcoin reserve, allowing the State Investment Commission to allocate up to 10% of excess state reserves into digital assets, including Bitcoin (BTC); the bill is still under review. 

Other Bitcoin reserve bills move forward

Meanwhile, Oklahoma’s House Bill 1203 (HB 1203), known as the Strategic Bitcoin Reserve Act, has passed the State House of Representatives 77 to 15, according to the crypto advocacy group, the Oklahoma Bitcoin Association.

The bill was introduced to the Oklahoma House of Representatives on Jan. 15 by state Representative Cody Maynard and passed the Government Oversight Committee with a 12–2 vote on Feb. 25. 

Related: Crypto bills stack up across the US, from Bitcoin reserves to task forces

It must now pass through the Senate before the Oklahoma governor can veto or sign the bill into law. Oklahoma state Senator Dusty Deevers also filed legislation on Jan. 8 that would allow residents in the state to receive salaries in Bitcoin. 

Bitcoin legislation tracker group Bitcoin Laws said in a March 24 X post that Oklahoma has now moved into equal second place with Texas in the State Bitcoin reserve race.

Oklahoma has now moved into equal second place in the State Bitcoin reserve race. Source: Bitcoin Laws

Arizona remains in the lead after two strategic digital asset reserve bills cleared Arizona’s House Rules Committee on March 24 and headed to the House floor for a full vote.

Bitcoin Laws speculates that because Republicans dominate the Oklahoma Senate and the governor is Republican, the bill “has a good chance to pass into law.” 

Missouri’s Special Committee on Intergovernmental Affairs is also in the process of evaluating the state’s Bitcoin reserve bill, according to Bitcoin Laws.

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