Crypto.com token falls 25% after staking rewards cut

The Crypto.com cryptocurrency platform announced a substantial cut in staking rewards for the CRO token on prepaid cards. The asset’s price fell in response.

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— Crypto.com (@cryptocom) May 1, 2022

On May 1, the company published new rates, which will take effect in a month. On average, for cards, rewards on CRO-staked funds locked for 180 days will be reduced by 69.5%. For entry-level Midnight Blue cards, staking will become unavailable.

The company also introduced monthly reward caps. For Ruby Steel it will be $25 per month, for Royal Indigo and Jade Green — $50.

Management explained that the changes are necessary to “ensure long-term sustainability.” The community reacted negatively to the announced changes.

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— 🎯 TrustInMemes 🎯 (@jessedurant13) May 1, 2022

On May 3, Crypto.com CEO Kris Marsalek said the decision would be adjusted to ensure “a more balanced approach.”

“The community has been very vocal about the announced changes to the card programme. We care about you, we hear you and listen. As a result, we are revising staking rates,” he wrote.

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.

As a result, we’re revising card staking rates. 🧵

— Kris | Crypto.com (@kris) May 3, 2022

According to him, instead of a full withdrawal of rewards, the company will offer 8% annual staking for Obsidian, Icy White and Frosted Rose Gold cards. For Royal Indigo and Jade Green the rate will be 4%. As of writing, the platform’s official decision had not been published.

The CRO token, after the staking changes for cardholders were announced, slumped from around $0.36 to $0.265 at one point — about 26%. The price recovered to around $0.29 after Marsalek’s tweet about the anticipated change to the company’s decision was published.

According to CoinGecko, in the last seven days the asset fell 28% and sits 21st in market capitalisation among cryptocurrencies, with a value of about $7.3 billion.

In January Crypto.com was hacked. The company initially denied losses, but later acknowledged an unauthorized withdrawal of $34 million.