Crypto exchange Crypto.com has been in the doghouse to start the week. After an update in which it announced a mass reorganization of staking and card rewards, the platform saw a significant downturn in Cronos (CRO-USD) prices. Today, investors are seeing the CRO crypto recover slightly as Crypto.com second-guesses its decision.
Crypto.com is one of the most sizable exchanges in the world. Indeed, in the last 24 hours alone, the exchange has processed a whopping $1.6 billion in asset transactions. This is due in large part to the company’s robust user base across a number of regions. According to the company, Crypto.com serves over 100 different markets with its exchange platform. It also serves a number of markets with its crypto payments card.
The card, launched in 2018, is a collaboration with financial services company Visa (NYSE:V). The product is one of the most popular crypto payment cards on the market. Furthermore, the company has reported great successes with the card recently. Last year, Crypto.com’s consumer spending report showed 55% year-over-year growth in spending among cardholders.
One can only imagine that this number has grown going into 2022, especially considering the company’s success in image-building. Indeed, since late last year, the company has secured the naming rights to what was previously the Staples Center and has rolled out numerous ad spots featuring A-list celebrities, including during the Super Bowl.
Earlier this week, though, the platform released details for broad changes planned for the card. These changes stoked the ire of users far and wide and sent Cronos prices tanking. Fortunately for investors, though, it seems that the company won’t be implementing the changes.
Cronos Losses Stabilize as Crypto.com Reverses Staking Changes
On Monday, the company released a post detailing changes planned for the Crypto.com card. Planned for rollout on June 1, the changes affect how many rewards card users can receive and reduces rewards for staking on the platform.
The changes would see rewards reduced to 2% for the highest-tier Crypto.com card. The two lowest tiers’ rewards would both be reduced to 0%. The company also planned to limit the rewards cardholders can receive in a month, halving the cap from $50 to $25. Staking rewards on the cards would also be vastly reduced, with the lowest tier once again being reduced to 0%, and the highest tier dropping from 8% to 5%.
These are massive changes that could certainly influence a cardholder’s decision to keep their card, or a prospective user’s decision to apply. The rewards slashes have caused a greatly negative response from users. Cronos prices dropped over 25% after the announcement, bottoming out at 26 cents.
Obviously, the response to the announcement is causing the platform to have second thoughts. Today, Crypto.com is announcing that it is not reducing the staking rewards so significantly. Rather, bottom-tier cards will see a 4% reward and higher-tier cards will see an 8% reward.
While the CRO crypto has obviously been in turmoil for the last two days, the announcement is a lifeline for the coin’s prices. Today, the coin is gaining 7%. Still, the coin is down 25% on the last seven days.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.