Last updated on July 7th, 2024 at 10:48 am
An announcement on reward changes on Crypto.com's popular Visa Debit card has investors unhappy.
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The price of Crypto.com’s native token, Cronos (CRO), dropped sharply as investors began removing their holdings after an unexpected announcement from the company slashing rewards benefits and earn rates.
The announcement was made on Reddit with users immediately voicing their displeasure.
While crypto investments are considered relatively risky compared to others, investors tend to stick to exchanges they trust and are stable. Crypto.com’s latest announcement effectively slashing rewards on their popular prepaid Visa debit card by upwards of 50% drops the card back into the realm (or worse) of typical cashback rewards programs offered by banks and credit card companies.
To get the best rates, investors lock up anywhere between $4000 and $400,000 which has many of them understandably upset.
The new rates also capped the monthly amount of rewards for lower-tiered cardholders essentially shutting the door on smaller investors.
Just hours after the announcement, CRO was down 17% to just under $0.30 per token (compared to a high of almost $0.90 in November) as investors were removing their CRO or exchanging it to a different cryptocurrency.
Many Reddit users also pointed out that with rates going down to that of credit cards and banks, the risk taken by investing in crypto with Crypto.com is no longer worth the rewards.
Speculations that Crypto.com is facing financial woes have been ongoing for some time. This latest change seems to indicate at least some truth behind the speculation.
While we don’t know what the company’s financial situation really is, Crypto.com has been spending a ton on marketing and even dropped a reported $700 million to rename the former Staples Center to Crypto.com Arena. The company also took a hit this past January when hackers bypassed their 2-factor authentication system resulting in the loss of millions of dollars worth of cryptocurrency.
While the future of Crypto.com is ultimately unknown, it appears that many investors who got on board because of the various benefits aren’t waiting around to find out.
In a somewhat surprising twist, within 24 hours, the outcry was so large that the CEO revised the card staking rates – to make the cut just a little less painful.
The community has been really vocal with regards to the changes to the card program announced yesterday. We care deeply about the community, we hear you & always listen to you.
— Kris | Crypto.com (@kris) May 3, 2022
As a result, we're revising card staking rates. 🧵
You can read the full original announcement below:
Sharif Jameel is a business owner, IT professional, runner, & musician. His professional certifications include CASP, Sec+, Net+, MCSA, & ITIL and others. He’s also the guitar player for the Baltimore-based cover bands, Liquifaction and Minority Report.
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