Crypto.com-Backed Cronos Blockchain Halts, Rewinds History Amid Ongoing Theft
The Cronos blockchain, supported by Crypto.com, halted and rewound its history after an ongoing theft due to the Tectonic protocol. The protocol, which Crypto.com had promoted for months, was compromised, allowing a thief to withdraw real collateral from DeFi lending protocols using an artificially inflated price of TONIC.
Crypto.com supplied one of the largest retail onramps for Tectonic and listed TONIC for trading on its main exchange. The exchange also advertised staking returns of up to 100% per annum and promoted staking rewards within its Crypto.com DeFi Wallet.
Kris Marszalek's Crypto.com exchange offered TONIC purchases through over 20 fiat currencies and advertised TONIC-denominated Visa card spending at 80 million merchants. The Tectonic oracle page lists only two data sources for the USD price of TONIC, VVS Finance and Crypto.com.
The total value locked (TVL) on Cronos DeFi protocols has fallen 92% since 2022. This controversy is not the first in Crypto.com's history, as they 'permanently' burned 70 billion CRO tokens to boost scarcity and hype the price of its token in 2021.