Cryptocurrency exchange Crypto.com has announced massive cuts to Cronos (CRO), securing rewards for most tiers of prepaid VISA cards, sending the token’s price down nearly 30% in less than a week.
Sunday’s blog explained that the card’s rewards will drop by an average of 69.5% and 100% on the lowest-tier Midnight Blue card to “ensure long-term sustainability.” On the highest-level Obsidian card, which requires at least $400,000 in CRO, rewards will drop from 8% to 5%. Changes to the bonus schedule will begin on June 1st.
However, cardholders who have an active membership six months prior to Sunday will not see their rewards schedule change until the current deadline expires.
In addition to bonus rates, there will also be a certain limit on three levels of cards. Ruby Steel will be capped at $25 per month, while Royal Indigo and Jade Green cards will be capped at $50 per month as bonuses.
Existing gamblers are outraged by the exchange’s sudden move to change the bonuses. Prominent gambler Defchart told his 170,000 Twitter followers on Monday that the exchange’s decision was the “dumbest move of the day.”
And for the dumbest move of the day, https://t.co/2VyM3mIsbK CRO$ They decide to reduce their bonuses, add a stupid monthly bonus that takes away the staking incentives.
Luckily, I’m only interested in cryptocurrency to deduct my expenses, but yeah, that was a stupid move. pic.twitter.com/qhhpatlpsi
– Devchart (devchart) May 1, 2022
In response to the community’s backlash, Crypto.com CEO Kris Marszalek tweeted on Tuesday that the planned changes would be tweaked to reflect a “more balanced approach.”
Instead of issuing individual changes for each class, he said, members who use Obsidian, Icy White, and Frosted Rose Gold cards will receive an annual payout of 8%. Royal Indigo and Jade Green holders will receive an annual return of 4%. This modification was not confirmed on the exchange’s blog.
Instead of eliminating the win fee on cards entirely, we’ll offer a more balanced approach: 8% APY for private members (Obsidian, Glacier White and Rose Gold) 4% APY for Royal Indigo and Jade Green cardholders
– Chris | Crypto.com (kris) May 3, 2022
When Cointelegraph asked the exchange how much sustainability it hopes to gain from reducing rewards, a Crypto.com spokesperson responded via email:
Crypto.com is committed to providing the best possible products and services that meet the needs of our customers around the world. Our recent changes have been made to bring our expanded programs significantly closer to long-term sustainability, and we continue to offer attractive rewards and opportunities for our clients.”
The news clearly had a negative impact on the price of CRO, the native token of Crypto.com’s CRONOS blockchain network. CRO price started to decline on Sunday from $0.36 earlier today to $0.28 at the time of writing, according to data from Cointelegraph. It has lost 30% in the past seven days, according to CoinGecko.