The Downfall of Crypto.Com - YouTube

crypto.com recently made some controversial  decisions the first one was a major decrease  

in staking rates and the second one was a rework  in the card staking tiers as a result the staking  

requirements for the jade green card ran from 10  000 cro all the way up to 25 000 cro and more than  

doubled and the interest rate you would receive on  the staked cro went from 16 back to 10 as a result  

the price of cro started to plummet i joined  crypto.com earlier this year and i was really  

happy with the platform i was receiving huge  interest rates and their card was pretty nice  

but the last couple of months something became  apparent the more crypto.com grows the less  

attractive the platform is becoming they've  offered some great products throughout the years  

i'm talking about the mco cards the interest rates  in the urn program the cro airdrops but all of  

them got cancelled or reduced drastically if this  is the cost of growth is it really worth it then

to show you why i feel this way i'm going to go  over the history of crypto.com and it all started  

back in 2016 when they were still a company  called monaco in june 2016 monaco was founded  

as a cryptocurrency visa card company almost one  year later in may 2017 they launched their token  

mco their ico raised an impressive 26.7 million  us dollars and it was listed on the 18th of may  

getting listed on a major exchange is always  huge news for a token and the same happened  

for mco in the middle of august the partnership  with binance was announced and immediately the  

price shot up mco reached an all-time high of  27.10 us dollars at the end of august imagine  

buying mco at that price but like everything all  good things must come to an end and that brings  

me to the asset contracts the asset contracts  were an important part of the monaco white paper  

every time monaco card users would use their card  monaco would charge a one percent licensing fee  

all these fees were automatically sent to an asset  contract and all mco token holders had a stake in  

that asset contract the white paper states that  at any time a holder of mco can redeem and burn  

the mco for a share of each token held by the mco  asset contract the holder will irrevocably destroy  

the mco and in exchange the mco asset contract  will transfer the underlying tokens to the holder  

so basically you would use your monaco card to  spend bitcoin or ethereum for every transaction  

monaco charged a 1 licensing fee which was sent  to the asset contract if you held mco tokens you  

would be able to burn those tokens in exchange  for some of the bitcoin and ethereum that was  

held in the asset contract so the next paragraph  states that the mco token will have a market value  

at or above the assets contained in the mco  asset contract if the value goes below market  

participants will be incentivized to purchase  mco and burn it this will then push the value of  

mco back up so this was really a great incentive  for people to buy and hold mco it was not only a  

token with a limited supply there was also the  asset contract which basically meant you could  

burn your mco in exchange for bitcoin and ethereum  and this would be beneficial for the price of mco  

it really was a win-win but out of the blue all  of a sudden the asset contracts got cancelled  

there was an ama where the ceo of monaco  chris marzalek explained why they did it but  

unfortunately that video has been set to private  so what got cancelled asset contracts you were  

able to burn mco to receive tokens what was the  requirement in order to burn mco you would need to  

hold mco what was the reason of the cancellation  changes in the regulatory environment as a  

compensation monaco increased the card cashback  rates by 2 after the cancellation of the asset  

contracts the price of mco went down rapidly but  shortly after it got announced that mco would be  

listed on four major exchanges and the price went  up significantly in july 2018 monaco rebranded to  

crypto.com this was in my opinion a brilliant move  the domain name crypto.com cost him 12 million us  

dollars but it does have a nice ring to it if  you can say your company is called crypto.com  

especially for customer acquisition chris marzah  gave the following statements crypto.com gives us  

a powerful new identity in line with our original  vision to put cryptocurrency in every wallet  

as a namer taking on is also representative of the  entire space it comes with a huge responsibility  

to carry the torch we will strive to deliver  impact worthy of the name and build infrastructure  

that enables growth of the ecosystem delivering  on the promise of a decentralized future and that  

illustrates why the domain name crypto.com  is so important for people new to the space  

if they stumble upon a company called crypto.com  they will definitely immediately be interested so  

shortly after this rebrand crypto.com made a huge  announcement in november 2018 crypto.com announced  

cro cro would become a new token of crypto.com but  mco would remain to exist on top of this all mco  

holders would receive airdrops basically if you  held mco in your crypto.com wallet you were going  

to receive a monthly airdrop of cro this was going  to happen over a period of 5 years the white paper  

stated that ten percent of all the cro was set  aside for mco token holders so just like the asset  

contracts the cro air drops were a nice incentive  for people to buy and hold mco if you held mco you  

were going to receive free cro tokens but not five  years but only seven months later the airdrops got  

cancelled the reason was in preparation for our  upcoming us cart launch we're also updating the  

terms of cro token air drops so the users in  the united states were going to receive mco  

visa cards but in exchange for this people had to  give up the cro air drops so what got cancelled  

zero air drops if you held mco in your wallet you  were going to receive free sierra every month the  

requirement for this was that you held mco in  your wallet and the reason of the cancellation  

was the upcoming us card launch there were some  articles about the airdrops and the cancellation  

on the crypto.com help page but for some reason  they've all been deleted a couple of months ago  

they were still there the cancellation of the  airdrops didn't stop crypto.com from growing  

a few months later in september 2019 they  reached the milestone of 1 million users and they  

announced earn 3.0 if you held 500 or more mco  in your crypto.com wallet for a period of three  

months you are going to receive 18 annual interest  on your cro this of course was really interesting  

and the platform continued to grow it grew so much  that by july 2020 they reached a milestone of 3  

million users and one month later they dropped a  bomb in august 2020 crypto.com announced the mco  

swap all mco was going to get swapped for cro and  the community was outraged and there were three  

main reasons why people were upset the first one  was the swap ratio for each mco that you swapped  

you were going to receive around 30 cro according  to the community this was a little bit too low  

crypto.com calculated this ratio in the price  difference between mco and cro of the last couple  

of weeks the timing for this was quite unfortunate  because cro was at a really high point and mco was  

relatively low the second reason why a lot of  people were upset was the token itself mco had  

quite a limited total supply while cro had a huge  total supply for the third reason i have to go  

back to 2018 when crypto.com announced cro chris  marzelag the ceo did an ama in that ama he stated  

the following but at no point in time will there  be a swap from mco token to cro token so of course  

people were really upset and i don't want to go  too much into detail about this swap but what  

i can say is that i feel like crypto.com could  have handled it a lot better the mco swap left a  

bitter taste in the mouth of a lot of crypto.com's  customers and from a customer's point of view it  

did feel really bad but of course from a business  point of view it's totally a logical decision the  

mco token was really beneficial for the users  while cro token could also bring benefits to the  

crypto.com platform so from a business point of  view i can really understand it but of course it's  

only beneficial for the business if the users are  happy with it in the long term i really feel like  

it could have been a totally different scenario  if crypto.com was a lot more transparent and open  

about this the main issue here is that there were  a lot of incentives for people to buy and hold  

mco and it just kind of feels bad when it gets  swapped out all of a sudden so what happened  

the mco swap mco got cancelled for cro reason  to get fully regulated as a business there's  

not a lot of details regarding this subject but it  might have something to do with the label of being  

a security but i'm not gonna speculate about this  as for the compensation there was a reduction of  

the card saying requirements after increasing  them first plus on top of this there was a 20  

crbo bonus when you swapped instantly this is  really important to note because the 20 bonus  

incentivized a lot of people to do the instant  swap but if you did it your cro would get staked  

on the exchange for six months this means that  you couldn't sell off your cro for the upcoming  

six months this of course was good for crypto.com  and the price of cro and this finally brings us to  

october 2020. a lot has happened in this month  and there were two major things the first one  

being the reduction in the staking rates i'll take  the exchange as an example if you staked cro on  

the exchange you would get twenty percent interest  this interest rate was reduced from twenty percent  

to six percent which was a major decrease one  day later crypto.com made the announcement  

that they listened to their community because the  community was really upset about this announcement  

and they upgraded the staking interest rates back  from six percent to ten percent when we're talking  

about the exchange on top of this news crypto.com  also announced new card staking tier requirements  

basically the staking requirements more than  doubled if we take the jade green card for example  

the initial staking requirement was 10 000 cro it  more than doubled and now you would need 25 000  

cro in order to receive the card after all these  announcements the price of cro started to decrease  

rapidly there's multiple factors you have to take  into account when you talk about the price of an  

asset not only is this bad news the cause of a  price reduction but there's also the factor of the  

mco to take into account a lot of people staked  cro on the exchange where you had to lock it for  

six months so some of these people might say that  when their stake expires they're just gonna sell  

off their cro which also will bring the price down  a good indicator for this are the syndicate events  

reddit user harold fonda made this post about five  months ago and it lists all the syndicate events  

and it gives some details about it if we see the  amount of users that participated in the bitcoin  

syndicate event in the 2nd of july we see that  there were 15 000 people well if you look at the  

most recent syndicate event the 28th of october  there were only 3 700 people that participated  

this could be an indicator that there are less  people that have staked cro on the exchange  

so since july the user base of crypto.com has  exploded but the syndicate event participants  

are going down drastically i do have to add that  the requirements to participate in the syndicate  

event have become a little bit more strict this is  also a cause for the decrease in users so what's  

my opinion about all of this well i try to stay as  objective as i can but i just noticed that every  

time crypto.com announces something big or if  they reach a new milestone something else has to  

get cut examples for this are the airdrops that  got cancelled for the us card launch when they  

reached 5 million users they decided to decrease  staking rates and so on so it's quite peculiar  

that the more users crypto.com gets the less  attractive the platform is becoming interest rates  

are starting to fall behind if you compare it to  competitors and the card's staking requirements  

more than doubled i can understand that rules  and regulations are very difficult to work with  

if you want to get regulated globally it's not an  easy task and of course it's also really difficult  

to be profitable with a business but i just don't  think it's fair that you incentivize people to buy  

mco or cro give them all sorts of rewards and then  just cut them all out of the blue a good example  

for this is my cro stake on the exchange i staked  a little bit over 10k zero on their exchange to  

participate in the syndicate events and to receive  the high interest rates so much has happened in  

the last six months i'm talking about the mco  swap the reduction in the staking rates the car  

tier requirements i just feel like i invested in a  product that i believed in a couple of months ago  

and in just that short period of time it kind  of feels like a totally different product  

and i'm not just talking about price i mean it's  cryptocurrency i know it's a volatile environment  

i can live with that but i'm just talking about  the product itself a couple of months ago i  

invested in a product that i believed in it  just doesn't feel the same it's kind of lacks  

confidence or stability and if you want to ask  money from people i feel like that is something  

you have to offer a major breaking point for a  lot of people was the mco swap i feel like if  

crypto.com was a lot more transparent about  this it would have been a totally different  

story and don't get me wrong crypto.com has done  great things in the crypto space um they have one  

of the best crypto visa cards out there their earn  rates their interest rates were one of the highest  

that you could get so it was really a nice  platform oh i almost forgot to mention their app  

it's just one of the best user experiences you can  find in cryptocurrency in the most recent ama the  

ceo said that they have a multi-year plan which  they are executing and they're sticking to it  

he then referred to their growth in 17 18 and  19 thanking this plan so what was this plan and  

what has happened the last couple of years well  crypto.com offered some amazing products the  

mco card air drops the earn rates and so on  it just feels like the more that they grow  

the worse they're becoming and i really wonder  if it's worth the growth then for the platform

so that was it for my video about the  crypto.com platform it was a little  

bit longer than normally but i hope you  still enjoyed it i just wanted to share  

um my experiences and how i feel about  crypto.com and all these recent changes  

if you have any questions or remarks please  leave a comment i also have a discord server  

where i talk about cryptocurrency and the stock  market i'll leave a link to that description if  

you enjoyed this video please leave a like and  subscribe i want to thank you for watching and bye