Last updated on July 23rd, 2022 at 11:14 am
CDC's cutting of benefits and hemorrhaging of their customer base has folks asking if their business model was destined to fail from the start.
A few months ago we talked about CDC cutting earn rates to their customers who staked for their native Cronos token. Since then many more benefits have been reduced or eliminated including some merchant rebates such as Spotify and Netflix reimbursements. Needless to say, customers are extremely unhappy.
As the value of crypto has come down significantly over the last 6 months, exchanges have struggled to maintain solid financial footing with some going completely bankrupt. Crypto.com seems to be doing all they can to stay afloat, but it has customers worried and unhappy.
The official notice is below:
Since its launch in November 2018, the Crypto.com Visa Card has grown to become the world’s most popular crypto-linked card programme and is now available in over 60 countries. In an effort to ensure long-term sustainability of our card programme – with the primary purpose to enable cardholders to spend their crypto safely and easily – we are adjusting our merchant benefits program for select Card tiers.
Revision of Merchant Rebate Benefits
Existing Jade Green, Royal Indigo, and Ruby Steel Crypto.com Visa Card users who activated their Card before 23 July 2022, 15:00 UTC will enjoy the merchant rebate benefits (Spotify, Netflix) available through their Card tier and subject to current conditions for six more months (until 23 January 2023, 15:00 UTC). Thereafter, cardholders will not receive CRO reimbursement(s) when spending with these merchant(s). Instead, cardholders will receive up to 2% back when spending with these merchants, depending on their Card tier.
Private Members holding an Icy White, Frosted Rose Gold, or Obsidian Card will continue to enjoy their existing merchant rebate benefits.
For Cardholders Who Upgrade After 23 July 2022, 15:00 UTC
For cardholders that upgrade their Card tier or CRO stake, they will enjoy the merchant rebate benefit(s) offered with the new Card tier for six months starting from the date of the upgrade. The extension of benefits when upgrading applies to all new and existing cardholders who are upgrading above their highest previously staked Card tier (please see FAQs for more details).
Merchant rebate benefits will not expire after six months for cardholders upgrading to the Icy White, Frosted Rose Gold, or Obsidian Cards, for as long as the cardholder maintains one of these cards.
Merchant Rebates for New Cardholders Will Be Valid for Six Months
Effective 23 July 2022 15:00 UTC, new Jade Green, Royal Indigo, and Ruby Steel Crypto.com Visa Card users will only be eligible for merchant rebates for the first six months upon card activation. Thereafter, the six-month rebate benefit will expire, and they will no longer receive the CRO reimbursements. This revision is applicable to all merchant rebates that cardholders are eligible for based on their Card tiers.
Private Members with an Obsidian, Icy White, or Frosted Rose Gold Card will continue to enjoy merchant rebates without expiration.
For new customers who stake a hefty amount of money, they will receive the benefits for 6 months only. Unfortunately, with the price of Cronos dropping, it’s likely the staked amount will decrease in value in excess of the merchant rebates causing many customers to begin moving their coins off the platform.
What’s the Point?
The slashing of merchant benefits has made the CDC card no better than most decent credit card reward programs, without the risk of tying up money into a volatile asset to unlock the rewards. Customers unloaded on the company on Reddit when the notice appeared there.
Will Crypto.com become the latest casualty of dropping cryptocurrency prices? No one can say for sure as their financials are kept private. What we do know is that they’re hemorrhaging their customer base in the name of sustainability. If true, this calls into question whether their business model is valid enough to continue operating.
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