Crypto.com announced it would be reducing rates starting in April a couple of weeks ago. Last night, crypto.com once again slashed rates with zero notice even further and effective immediately. Users who went in to place their crypto assets in the exchanges "Earn" platform saw their rates of return tumble.
I am a user of crypto.com and have been a critic of how they communicate and handle customer service recently, you can see my frustrations laid out in a couple of articles released this month.
Within the platform, I do hold some Bitcoin in a three-month locked earn program so that will maintain its current rate for just over a month that is left remaining. I do not have any stablecoins in the earn platform that cut rates a few weeks ago in half, from 12% down to 6%. In terms of communication, crypto.com announced the earlier rate cut in a message labeled "New tiered rates structure and higher rewards for select tokens." When you read the headline it sounded positive, however, when you look at the actual rate changes you realize it was anything but and therein lies one of my big issues with the centralized exchange based in Singapore.
This morning users like myself received an email telling us of their latest cut. In my case, the email came at 4:52am labeled "New Crypto Earn Rates for Select Tokens and Stablecoins". These cuts are "Effective as of 26 March 2022, 06:00 UTC" and included BTC, ETH, LUNA, ATOM and EGLD in addition to all the stablecoins. Since I stake less than $400 in CRO, my BTC return for a three-month lockup will drop from 4.5% to 3%, or a reduction of 33%. With the CRO requirement I could push my return to 4% and without it a one-month lock up nets you a 1.5% while no lockup gets you .5%.
It seems crypto.com's focus isn't on servicing its existing customers or providing them competitive returns. So where is their focus or money going? Well this comes on the heels of the newly announced FIFA World Cup sponsorship deal so that is a big clue. The old Staples Center in Los Angeles has been renamed Crypto.com Arena in a deal estimated at $700 million. The company also has major sponsorship deals with the Ultimate Fighting Championship (UFC), Formula 1 racing and the Australian Football League (AFL). They have been spending big on Super Bowl commercials featuring LeBron James and other ads featuring Matt Damon have been in heavy rotation in 2022. It should be no surprise they don't have money left over for maintaining customer rates with this explosion in marketing.
Crypto.com is focused on building their brand name and gaining new customers. Many will likely be new to crypto, which could be good for the crypto industry overall. They are predicting a huge adoption rate in crypto and want to be the place these new investors turn. There native token, Cronos (CRO) has seen significant growth and is now a top 20 token ranked by market capitalization. Their business model is pretty clear.
Honestly, this approach is probably a really smart business decision and will likely pay off big time over both the short and long-term. That said, for customers like myself, this will cause us to reconsider our holdings here and look elsewhere for better returns. I will certainly look at other options and only hold a small percentage of my Bitcoin at Crypto.com (less than 7%) at the moment. Even so, I like many aspects of crypto.com and was considering getting my Cronos holding to the $400 level and applying for one of their metal debit cards that you can earn crypto as a cash back reward. I'm a little more hesitant at this point, disappointed in their instant deposit program, customer service and now crypto interest rates.
I understand, not every centralized exchange, or decentralized platform for that matter, is right for my personal needs. I'm open for new suggestions, so where do you recommend hodling your coins and getting solid interest rates?