What Are the 3 Things People Get Wrong About Crypto.com Coin (CRO)?

1) CRO Represents Equity in Crypto.com

First of all, Crypto.com is a private company. They are not publicly traded on any world stock markets, nor have they released any statements declaring that they have plans to go public anytime in the near future. Similar to BNB, some people think that the signature tokens of the respective ecosystems represent equity in the company itself. Nothing could be further from the truth. CRO is a cryptocurrency operating on a decentralized blockchain called Crypto.org Chain. There is no legal or financial backing to CRO whatsoever.

With all that being said, you can abstractly think about CRO as equity in the Crypto.org chain, and the broader Crypto.com ecosystem. It’s no wonder that people conflate CRO with equity.

By staking CRO on Crypto.org Chain, you are entitled to voting rights and staking rewards. Both of those things have close analogies in the equity stock market. For example, staking rewards could easily be construed as dividends from the organization. However, staking rewards are definitely not dividends, as they are not coming from the profits of Crypto.org Chain. Instead, the rewards are the result of inflation in the system, as they come from a pool of previously locked CRO. So while CRO doesn’t represent equity in Crypto.com, it definitely gives an equity-like feel of ownership over Crypto.org Chain.

2) The Crypto.com Visa Card Lets Users Spend Crypto

Before actually receiving the Crypto.com Visa debit card, it is common for people to think that they can spend their cryptocurrency directly from the card. It makes sense in theory, just subtract an amount of BTC, USDT, or any other cryptocurrency that is equivalent to the fiat amount that is required to be paid. This is not how the Crypto.com Visa debit cards work though. The cards must be loaded with fiat currency for spending. There needs to be more fiat in the account than what is required to be paid at the point of sale. This is actually no different than a regular checking account at any regular bank.

There is a propensity to think of the Crypto.com Visa card as a credit card. The confusion comes from the label of being a Visa card. People hear Visa, and think credit. But once again, the cards need to be loaded with fiat before spending at the point of sale. With all of this being said, Crypto.com has made it pretty simple to load your card with fiat currency. More than 20 cryptocurrencies can instantly be sold into fiat and loaded onto the card. Users are able to spend from that card 30 seconds later. In essence, this is spending cryptocurrency from your Crypto.com Visa card.

But the devil is in the details, and the details matter. Spending cryptocurrency directly from the card is just not how they work, and this fact can confuse people who are considering acquiring a Crypto.com Visa card.

Finally, you might not be able to spend crypto but you RECEIVE crypto every time you make a payment thanks to the rewards program that awards anywhere from 1-8% back in CRO.

3) Crypto.com and Crypto.org Are the Same Entity

In March of 2021 Crypto.com launched Crypto.org, an independent blockchain that runs their core token, CRO. It is tempting to think of Crypto.com and Crypto.org as one and the same thing, but there is a bit of nuance to their relationship. Crypto.org is an independent blockchain run by a network of validators. As far as anyone can tell, Crypto.com does not run any of the validators in the network. This is a common tactic used by cryptocurrency exchanges that also have a token, to legally distance themselves from the token. The company can then claim to regulators that they have no ability to alter the direction, or issuance of the project and token. For some this might be a stretch, but it seems to do the trick when gaining the favour of regulators.

Crypto.com is an exchange that routinely goes out of its way to be on the good side of the authorities. For example, in Canada you cannot borrow, margin trade, or have access to derivatives trading. Even though those offerings are available to people in Singapore. They’ve managed to tweak their platform according to the regulatory policies of different geographic regions.

Crypto.com has taken a similar approach with respect to CRO and Crypto.org. They’ve built the codebase that drives the blockchain, and released it as open source. Then they’ve let the public run the nodes that make up the network removing themselves entirely from needing to run it. If they don’t run it, then are they really the same entity? Crypto.com is a private company with a CEO, employees, and a headquarters in Singapore. Crypto.org is a decentralized blockchain with validators, community members, and no headquarters. Although it may seem tongue-in-cheek, Crypto.com and Crypto.org are not the same entity.