Crypto.com CRO price falls after Visa card rewards slashed

The prepaid card lets platform users spend their cryptocurrencies and stablecoins in fiat currency at Visa-accepting merchants, with users topping up funds periodically from their Crypto.com accounts. Cardholders earn their membership by engaging with Crypto.com’s own cryptocurrency, CRO token. If they stake the token—thus supporting its blockchain consensus mechanism—they unlock successive card tiers, each burnished in whimsical colors:

• Midnight Blue
• Ruby Steel
• Royal Indigo/Jade Green
• Icy White/Frosted Rose Gold
• Obsidian

To reach the Obsidian tier, cardholders must stake $400,000 worth of CRO for at least 180 days.

Spending with the card reaps cash back rewards, which are paid out in—you guessed it—CRO tokens. But with the recent move, the rewards rates will drop from 8% to 5% for Obsidian members; from 5% to 3% for Icy White/Frosted Rose Gold; from 3% to 1.5% for Royal Indigo/Jade Green; from 2% to 0.5% for Ruby Steel; and from 1% to 0% for Midnight Blue, starting June 1. Furthermore, rewards would be capped at $25 to $50 per month for lower tiers.

That’s a significant cut, which Crypto.com said was necessary to “ensure long-term sustainability.” But its users are lashing out on social media, with the general consensus being that the platform just lost itself a lot of customers who are taking their business elsewhere after their current staking periods are up. And the hits keep coming for card holders, as CRO’s price has fallen by nearly 15% since then (as a reminder, rewards are paid in CRO).

It could be momentary backlash, or it could kick off a long-term downturn for Crypto.com, which has skyrocketed in popularity over the last year, partly because of its high-profile sponsorships with Formula One and Matt Damon, but largely because of its generous rewards program. At the end of the day, most knew that the program was too good to last, but disgruntled social media users argue that they weren’t given enough notice to mentally or financially prepare for the sudden shift.