Crypto.com Cuts Card Rewards to Customers' Dismay
Crypto.com's move to significantly cut the cashback rates on its card product has sent the project's native token, CRO, plummeting by 17% on the day.
- Crypto.com announced yesterday that it will phase out the staking rewards and lower the cashback rates on its popular prepaid Visa cards.
- Due to take effect on June 1, the changes will see the reward rates on the company's cards drop from 1%-8% to 0%-2%, depending on the card's tier.
- The move has sparked outrage within the community, sending the CRO token plummeting 17% on the day.
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Crypto.com announced yesterday that it plans to phase out the staking rewards and slash the cashback rates on its Visa cards on June 1. The move has sent the community into dismay, with many now questioning the whole viability of the card product itself and the company’s health.
Popular Prepaid Cards Get a Haircut
One of crypto’s favorite prepaid cards is getting a downgrade, and nobody’s happy about it.
In a Sunday blog post, crypto exchange and service provider Crypto.com announced that it would be cutting the staking and cashback rewards on its Visa-backed prepaid cards in changes due to take effect June 1. Whereas under the old program, Crypto.com cardholders could get anywhere between 1% то 8% in CRO cashback rewards, depending on their card’s tier level, with the new changes, the rates have been slashed to 0% for the first two tiers, and 0.5%, 1%, and 2% for the top three tiers. Before the latest changes, cardholders had to lock $400,000 worth of CRO tokens on the Crypto.com platform to get the highest cashback rate of 8% or obtain to the so-called Obsidian card. However, Crypto.com is phasing out the staking rewards entirely with the new changes, leaving out only the significantly reduced non-staking benefits.
“CRO staking rewards will no longer be offered to Jade Green, Royal Indigo, Frosted Rose Gold, Icy White, and Obsidian cardholders from the Effective Date,” the company said in the blog post. There will be no change in the remaining card benefits, including the 100% reimbursements for Netflix, Spotify, and Amazon Prime subscriptions.
The revisions to Crypto.com’s card reward system have sent the project’s native token CRO plummeting by around 17% on the day. Many of the company’s users expressed dismay that the tokens are no longer worth holding and the card is no longer worth using. “Ouch, not going to lie: this was the only reason I was using their card. Have to look around for something new,” one of the top-liked comments on a Reddit thread discussing the changes said. Another user, going under AdrianoDM, said that he’s going to “use the card for the remainder of my staking period and then unstake and say goodbye to the card.”
Since the announcement of the changes on Sunday, many threads questioning the company’s health and the whole viability of the prepaid cards began popping up on Crypto.com’s dedicated subreddit. One of the top-liked threads for the day, headlined “Is this it?,” implied that slashing the card rewards was the “the worst mistake” the company could’ve made, while another demanded explanations from the company executives on their strategy moving forward.
Removing the staking rewards seems to have also slashed the incentives for holding the company’s native token CRO. Many users have already suggested that the CRO token no longer has any substantial utility behind it and that they would be unloading their holdings as soon as their staking lock-up periods end.
The CRO token is currently trading at around $0.29 per coin, down almost 70% from the all-time high price in November.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.