Crypto.com / Cronos (CRO)

Basics

• Founded in: 2016
• Mainnet release: Scheduled for 25-3-2021, the Mainnet will be launched as the Crypto.org Chain with Crypto.org Coin (CRO) as its native currency (22-2-2021). Update: got launched on time.
• Based in: Hong Kong registered (11-9-2020).
• from CMC:

"Founded in Switzerland in 2016, Crypto.com (MCO), formerly known as Monaco, intends to offer payment card products that allow consumers to borrow and spend cryptocurrency through the VISA payment network. The MCO Card is a Visa-branded debit card that is backed by a cryptocurrency-funded bank account. With connections to international foreign exchange banks to facilitate currency conversion, the project aspires to offer competitive interbank exchange rates for major crypto and fiat currencies regardless of the user's location. In Feb of 2017, Crypto.com (then Monaco) was accepted into a Hong Kong Government backed Cyberport incubation program."

Audits & Exploits

• Bug bounty program can be found [insert here].
• SafeCEX scored it 84% (8-12-2022):

⌛️ 29 days since Proof of Reserves

📎 [Announcement https://twitter.com/kris/status/1591036632664518657]

🔎 Assets included: BTC ETH SHIB USDT USDC

✅ Merkle tree available and verifiable online

✅ Merkle tree open sourced

✅ Wallet addresses made public

✅ Wallet ownership confirmed by third-party auditor

❌ Wallet ownership not proven publicly by custom message"

• CertiK claims to have done an audit for them, according to their website (12-6-2020).

Is it trustworthy?

• From this extensive blog criticising Centralized and Decentralized Finance (16-12-2019):

"Even though we reviewed more centralized platforms, the last one worth reading about is Crypto.com — or formerly Monaco.

Monaco was an ICO in the summer of 2017. They raised $27M. The token marketcap is currently $69M.

Here is a short history of the MCO token:

VISA card incoming!; uhhh, maybe later; Google Play VISA partnership!; pump; dump; repeat. Good times.

It seems that the legal structure ends on Malta (based on a simple Google Maps search, this is unsurprisingly a shell company).

They are operating under more entities though, so they also have incorporation in Hong Kong.

From all the platforms we looked into, Monaco/Crypto.com wins the award for the most complicated legal presence. They are also registered in Switzerland through an entity (STAX AG) that seems to specialize in registering companies in Switzerland. This was probably done for the purpose of the token sale.

User fund security seems more like a marketing stunt than reality — the business model requires the funds to be liquid at least proportionally and to be moved from lenders to borrowers and from the platform back to lenders.

Like everyone else, they use BitGo for insurance.

Summary:

+ If the company uses only their internal funds for liquidity purposes, it implies good deposit security for users

+ Flexible lock-up periods for lending

- Unclear legal structure

- History of token pumps and dumps (hence the rebranding)

- Funds accessible only through a smartphone app

- Lack of focus — many products at once (credit card, lending, crypto exchange, quant trading)"

Bugs/Exploits

• Cryptocom accidentally sent $400M to the wrong address.

• From Rekt (19-1-2022):

"After our initial investigation, ErgoBTC uncovered even more lost funds from Crypto.com. That brings the total value lost up to $33.7M, and moves Crypto.com up to position 15 on the leaderboard. And still no acknowledgement of any loss from Crypto.com. Certik wrote that: "The total loss is around 4,836 ETH and 282 users' wallets have been affected by the hack."

The hacker bypassed existing 2FA, they bypassed the withdrawal whitelist, could this attack really have come from outside? Even a "SOC2" audit from Deloitte couldn't stop this attack."

Token

Token allocation

• From the mainnet announcement (22-2-2021):

70 billion CRO will be burned according to the following schedule:

59.6 billion will be burned today, 22nd Feb, 2021.

10.4 billion is currently locked in a smart contract and will be burned monthly, as it gets unlocked.

This will increase the circulating supply of CRO from current 24% to over 80%. The remaining 5.9 billion CRO supply will be distributed as follows:

5 billion CRO will be allocated to mainnet block rewards for Chain validators and delegators which helps secure the network.

0.9 billion CRO will be allocated to Particle B for Chain ecosystem development."

Token Details

• Has two tokens; MCO and CRO.

MCO (MCO)

• MCO has a supply of 31,587,682 MCO and had it's CMC trading launch at 3-7-2017.

Crypto.com Chain (CRO)

• CRO has a supply of 100,000,000,000 CRO and had it's CMC trading launch at 15-12-2018.
• "Native Blockchain, Enabling transactions worldwide between merchants and cryptocurrency users — seamless, secure and cost efficient."
• Also used in its DeFi Swap for liquidity incentives (11-9-2020).

Tech

• Whitepaper can be found [insert here].
• Whitepaper of DeFi Swap can be found here (11-9-2020).
• Code can be viewed [insert here].
• Built on: the tokens were on Ethereum, but Crypto.org Chain will go live on 25-3-2021.

How it works

• From the mainnet announcement (22-2-2021):

"Crypto.org Chain is a public, open-source and permissionless blockchain - a decentralized network designed to be a public good that helps drive mass adoption of blockchain technology. Following more than 2 years of research and development, 2 testnets (Thaler and Croeseid) and a successful Mainnet Dry-Run Competition (Crossfire), the Crypto.org Chain is now ready for launch. Over 3,000 validator applications from all around the world were received during the Crossfire Mainnet Dry-Run where more than 275 million transactions were processed in four weeks."

Oracle Method

• Integrated Chainlink in its DeFi Wallet (14-9-2020).

Their Other Projects

DeFi Swap

• From Decrypt (11-9-2020):

"Crypto.com has launched a DeFi Swap service, allowing users to swap between various decentralized finance tokens. The firm is promising its customers up to 20x multiplier on their yields. Launched on the Ethereum mainnet, the service allows users to swap and farm DeFi tokens as well as provide liquidity and earn “Triple Yield. Its users can swap between any two supported tokens by paying a 0.3% swap fee while Crypto.com Coin (CRO) holders—as liquidity providers (LPs)—are incentivized for contributing to liquidity pools. “At launch, the entire amount of the swap fees (0.3% per swap) will be distributed to liquidity providers. Crypto.com reserves the option to later re-direct a maximum of 0.05% per swap to fund the ongoing R&D of the protocol,” the firm added. “Under the current set-up, users can get up to 20x multiplier, if they stake no less than 50,000,000 CRO for 4 years,” the firm added."

NFT Platform

• From the announcement (23-3-2021):

"Crypto.com Launching NFT Platform With Exclusive Content From Aston Martin Cognizant Formula OneTM, Axel Mansoor, BossLogic, Boy George, KCamp, KLOUD, Klarens Malluta with Lionel Richie, Mr. Brainwash, OPUS, Snoop Dogg, and More."

Roadmap

• Can be found [Insert link here].

Pros and Cons

Cons

From Cointelegraph (13-11-2022): "Just two days after Crypto.com made its cold storage information public, investigators found that 320,000 Ether was sent to Gate.io on Oct. 21, 2022. However, Kris Marszalek, the CEO of Crypto.com, dismissed any wrongdoing by stating that the funds were transferred accidentally and were eventually returned back to the original storage."

Team, Funding, Partners

Team

• Full team can be found [here].
• Kris Marszalek; CEO, "Seasoned company builder based in Hong Kong, 2x from $0 to $100m in revenue and 2 exits. CEO at Ensogo, Founder at BEECRAZY (sold for US$21mm to iBuy Group in 2013)."
• Bobby Bao; co-founder

Funding

• Boba Network; took part in their $45M raise (4-2022).
• From Cointelegraph (4-3-2021):

"Announced on March. 4, the new venture arm, named Crypto.com Capital, was launched to accelerate the growth of crypto startups, and to advance the growth of the industry in general, according to a press release.

The $200 million fund will be used to invest in seed rounds for promising startups, with single investments poised to reach anywhere between $100,000 and $3 million. Investments in Series A funding rounds will reach anywhere from $3 million to $10 million."

Partners

• Announced a partnership with Visa (18-3-2021).
• From EthHub (23-11-2021):

"Crypto.com has struck a 20-year deal with AEG, the owner and operator of the Staples Center in Los Angeles, to rename one of the most famous sports and entertainment venues in the U.S.

Staples Center, the official home to four professional sports franchises — basketball’s Lakers, Clippers and Sparks, and ice hockey’s Kings — will be renamed to Crypto.com Arena. The center has also hosted over 15 GRAMMY Awards shows. The upcoming GRAMMY Awards in January will also be held at the same center.

Crypto.com has agreed to pay AEG $700 million for the naming rights, a source with knowledge of the deal told The Block. This makes it one of the largest sponsorship deals in sports history."