Is the Crisis Brewing? Crypto.com’s Major Merger Falls Through, Rights Diminish, Executives Depart

Crypto.com’s merger plan with Trump-related MCGA has been terminated, with CRO dropping 70% in a year.

Written by: Protos

Compiled by: Chopper, Foresight News

Crypto.com has terminated a multi-billion dollar Digital Asset Treasury (DAT) plan, reduced credit card user benefits, and witnessed the departure of several executives, with its native token CRO plummeting by as much as 70% over the past year.

Last weekend, Crypto.com, Trump’s publicly traded company DJT, and another company whose stock code was derived from "Make CRO Great Again" jointly announced the termination of a multi-billion dollar merger plan.

The originally planned public listing of the digital asset treasury was positioned as "the first and largest publicly listed holder of CRO," but this plan has now fallen through.

To push this ultimately failed merger, the company even changed its stock code from YORK to MCGA, clearly referencing Trump’s iconic slogan MAGA.

Crypto.com CEO Kris Marszalek had previously predicted that MCGA would become the world’s largest holder of CRO, with a market value potentially surpassing CRO itself, and that it would "permanently" continue to buy CRO. Now, all these expectations have evaporated.

After the merger termination news broke, the price of CRO fell below $0.05, marking a low since October 2023. Concurrently, the second cooperation was also canceled: a partnership agreement initiated by Yorkville America behind MCGA, with Crypto.com providing ETF-related services.

The previously solid partnership between Crypto.com and the Trump brand has shown cracks. The three companies cited "current market conditions and changes in corporate and shareholder demands" as the official reason. Marszalek stated, "It is not reasonable to continue pursuing the deal in the current market environment."

Crypto.com Reduces Credit Card User Benefits for Staking CRO

This negative news further exacerbates user dissatisfaction. A previous policy adjustment by the platform had already triggered a wave of complaints from users.

At the end of July, Crypto.com sent emails to credit card users announcing a reduction in cashback rates and other credit card benefits such as airport lounge access. The new rules will officially take effect on October 1:

• The cashback rate for Ruby credit card holders is reduced by 0.5 percentage points, from 2% to 1.5%; the monthly spending cap for cashback is reduced from $1,250 to $750.
• More significantly affected are Icy White users: the previously unlimited 4% cashback policy is canceled, adjusted to 3.5% cashback, with a monthly spending cap of $3,000 for benefits.

To enjoy the corresponding benefits, users need to stake CRO tokens. Many cardholders pointed out that the tokens are still locked, yet the platform unilaterally changed the rules. One user stated, "This concerns integrity and trust. Everyone has reason to believe that the agreed-upon benefits should be honored during the lock-up period."

In addition to the reduction in cashback and lounge access benefits, the annual yield for CRO staking that supports credit card benefits will also be reduced on September 10:

• The annual yield for the Pro staking tier is reduced from 4% to 3%.
• The highest tier, Private staking, sees its annual yield reduced from 9% to 6%.

This is not the first time Crypto.com has cut credit card incentive policies. In May 2022, the platform suddenly reduced CRO credit card benefits, and under strong community protest, was forced to partially retract the adjustment within a few days.

Core Team Members Continue to Depart

The wave of executive departures has already begun. Crypto.com’s Chief Legal Officer Nick Lundgren resigned in April; despite Crypto.com’s own market predictions, he joined competing prediction market platform Underdog a few weeks after his departure.

The Chief Marketing Officer Steven Kalifowitz, who led a $700 million, 20-year naming rights partnership for the Crypto.com Arena, left on June 30. Chris Fargis, responsible for the prediction market business, departed on July 10, having served less than a year.

Before the executive departures, Crypto.com had already initiated large-scale layoffs. In March, the exchange laid off 12%, approximately 180 positions were cut.

In July, its derivatives subsidiary sued the Washington State Attorney General, claiming that under federal law, the platform’s sports prediction market is not subject to state-level gambling regulations.

On August 2, Crypto.com’s entire network of cryptocurrency deposit and withdrawal services was interrupted for about 3 hours. The platform’s status page at the time stated, "All user assets are safe."

At the time of writing, the trading price of CRO was around $0.047, with a year-to-date decline of about 48%, a cumulative drop of 71% over the past 12 months, and a staggering 95% drop from its historical high in November 2021.

Protos has reached out to Crypto.com for comment, but has not received a response by the time of publication.

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