What smart crypto investors can learn from Crypto.com

Six years after its launch, Crypto.com had confirmed its position alongside the likes of Binance, Coinbase and FTX as a top 10 crypto exchange.

Its distinctive lion head logo could be seen adorning some of the sports world’s most iconic arenas, and A-list Hollywood stars appeared in the frankly absurd Super Bowl ads.

Not to mention, its original Cronos token (CRO) was high (keen traders and investors scooped up about $26 million worth of Crypto.com’s original MCO token in 2017, and swapped it for the newly renamed Cronos in 2020) .

Life was pretty good.

Unfortunately, that’s the thing about crypto: it comes at you fast. And Crypto.com has discovered that in the last 12 months throwing money at glitzy PR gimmicks is no substitute for good fundamentals when the crypto winter hits.

With CRO continuing to drop in value, employees leaving the company in droves, and the exchange seemingly running out of money, some wonder if it will survive the winter.

Of course, it’s not alone in finding things pretty tough over the past year or so, with literally hundreds of tokens, crypto-based businesses and exchanges struggling as the market plunged. And unfortunately, this means that even more traders and investors lost as the projects, coins and companies they put their faith – and hard-earned money – into went bust.

Now obviously there is no such thing as a sure thing when we talk crypto. However, there are certain things you can look for to ensure that if the crypto winter hits, your investment is best suited to ride it out.

So here are just a few of them warning signs to look for to ensure you don’t get stung by the next Crypto.com.

Poor quality marketing

Much of the recent criticism of Crypto.com surrounds the firm’s marketing, from how much it spent to the ridiculous claims it made.

And this could be one great indicator that not everything is 100% correct with a project.

The company’s now infamous Fortune Favors the Brave commercial was one of the few ads from a digital asset company to air during the Super Bowl. Unfortunately, when you look past the fact that it starred Matt Damon and clearly cost a fortune, it just wasn’t very good. For starters, it equated buying crypto with 18th century sea voyages and used the phrase “fortune favors the brave” when the famous saying is actually “fortune favors the bold.”

So, Crypto.com obviously had a lot of money, but could not produce a coherent script or relevant messages.

Another thing to look for is marketing costs. Or, in Crypto.com’s case, a significant cut in marketing costs.

Sure, it was the Super Bowl spot and 700 million dollars The Lakers’ stadium sponsorship, however, as things got tough, it began pulling out of sponsorship deals and toning down its ad campaigns. It should be noted that a company scaling back marketing isn’t in itself a huge problem – after all, bear markets do happen – but it has to be said that Crypto.com’s scale back was noticeably severe.

A list of questionable colleagues

When choosing where to invest your funds, it is more than a little wise to check out exactly who the project and team has associated or worked with.

Sure, this might sound a little snobbish, but you know what they say: Lie down with a dog and you get fleas.

A brief deep dive into Crypto.com’s history shows that the company dropped the ball when it chose the infamous one German fraud Wirecard to be the card issuer.

When irregularities in Wirecard’s numbers were flagged during an audit in 2019, it was discovered that the company had “misplaced” more than $2 billion.

Despite Crypto.com promising to refund card users who lost money when Wirecard became insolvent, rumors that the two firms were sharing an executive were more than unhelpful. And while it was just a mix-up caused by two executives having similar surnames, it turned out that the Crypto.com boss in question had previously been involved in a number of failed companies in Australia.

Employees are jumping ship

Employees leaving a business – whether they are pushed or they jump – is never a good sign. Again, if you want proof, look no further than Crypto.com.

The company once had more than 5,000 employees, but this peaked in 2021. In June of this year, it had reportedly been cut the workforce by 2,000 people.

Read More: Even Matt Damon Couldn’t Save 2,000 Crypto.com Employees

A history of failed projects

It may sound simple, but a good way to measure a project’s potential success is to take a look at its results. Any legal issues? Failed projects? All potential red flags.

The original team behind Crypto.com sold approx $26 million worth of the platform’s initial token (then called MCO) in 2017. MCO later became CRO and holders were allowed to switch to the new token after the company’s rebrand.

Like Celsius’ CEL token, the CRO offered incentives to new users and increased returns to customers who locked it. It also offered loyalty and usage bonuses, including discounts on various services. These bonuses included debit cards with a CRO-based cashback system.

However, this system was only sustainable if people continued to join and lock CRO tokens. When new registrations dried up, the company was forced to cut those rewards and the token’s price dropped.

How about something that screams solid planning?

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