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The Crypto.com-supported Cronos blockchain had to halt and rewind its history this week to stop an ongoing theft due to the Tectonic protocol that Crypto.com had spent months promoting.
Tectonic warned users to pause using its protocol altogether. PeckShield first estimated the value of compromised funds at approximately $74 million.
Crypto.com supplied one of the largest retail onramps for Tectonic, this newly compromised protocol that nearly drained tens of millions of dollars from Cronos’ DeFi ecosystem. As fear about the hack has spread, Cronos’ $CRO token has lost 6% of its value over the past 24 hours.
Kris Marszalek’s Crypto.com exchange proudly offered TONIC purchases through more than 20 fiat currencies. Crypto.com advertised TONIC-denominated Visa card spending at 80 million merchants.
It listed TONIC for trading on its main exchange, advertised staking returns of up to 100% per annum, and promoted staking rewards within its Crypto.com DeFi Wallet.
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Crypto.com’s Earn program guide provided step-by-step instructions for TONIC staking, including mentioning its ‘automatic compounding’ of ‘earnings.’
Crypto.com’s DeFi Wallet even simplified TONIC staking with one-click access with no lock-up periods.
Tectonic’s oracle page lists only two data sources for the USD price of TONIC, VVS Finance and — you guessed it — Crypto.com.
Crypto.com’s Cronos blockchain halts, erases history
After Tectonic suffered an exploit on Sunday, the Crypto.com-supported Cronos blockchain stopped producing blocks. Validators erased some of the blockchain’s history by reverting to the pre-exploit state and then resuming block production.
Tectonic’s litepaper talked up its connections to Crypto.com and identified Particle B as its incubator, which was renamed Cronos Labs. Crypto.com’s $500 million investment arm is a “strategic partner to Cronos Labs.”
Researcher Weilin Li described the TONIC exploit as a Mango Markets-style price manipulation hack that allowed the thief to withdraw real collateral from DeFi lending protocols using an artificially inflated price of TONIC.
Although Crypto.com’s Cronos EVM blockchain describes itself as ‘permissionless,’ its official FAQ says its 33 validators serve by invitation only. Applications to become a validator are also closed.
Total value locked (TVL) on Cronos DeFi protocols has fallen 92% since 2022.
This controversy is certainly not the first in Crypto.com history. In 2021, Cronos ‘permanently’ burned 70 billion $CRO tokens to boost scarcity and hype the price of its token. However, in March 2025 it pushed through a community vote — using its own majority validator control and despite heavy opposition — to re-mint those 70 billion tokens into a ‘Cronos Strategic Reserve’ that restored supply to 100 billion as a de facto benefit to Crypto.com.
Crypto.com effectively controlled the Cronos Strategic Reserve in practice, because the exchange and its affiliated validators held majority power governing the Cronos chain, which administered the reserve’s terms. Before February 2022, $CRO tokens were known as ‘Crypto.com Coins.’