Crypto.com’s decision comes less than a month after BlockFi was fined $100 million for its loan products, and many assume that regulatory pressure was a factor in the decision.
According to reports, Crypto.com is providing users from countries that are not eligible for its loan scheme until March 15 to return their cryptocurrency debts.
The corporation added the United States, the United Kingdom, and 38 additional countries to its list of prohibited countries. European users from Germany, Switzerland, and the United Kingdom have all shared emails from the corporation regarding the loan’s conclusion date. It’s worth mentioning that the emails were also sent to some of these people who do not have crypto loans on the platform.
According to the new regulation, if users do not repay their debts by March 15, the exchange would sell their collateral and cancel their loan positions.
Customers of Crypto.com are outraged and in astonishment, with many stating that the exchange’s recent advertising and marketing spend has begun to take a toll on its balance sheet. The exchange’s strong marketing campaign over the last year has raised many eyebrows, given that, unlike many other crypto unicorns, the company has raised very little funding from investors.
It looks like the splurge in marketing is starting to take it's toll on the balance sheet
— 🌏XRP💰GLOBAL🌍 (@xrp_ninja) March 8, 2022
For a long time, Crypto.com’s marketing budget, which includes millions spent on celebrity endorsements, arena acquisitions, and much more, has been a source of contention on the internet. However, the abrupt change in its lending policy has heightened awareness of the hypothesis.
For over a year, crypto loan products have been under regulatory scrutiny, with numerous crypto businesses receiving security violation notices from state regulators. Gemini and Celsius were investigated by the US Securities and Exchange Commission (SEC) in January for supplying unregistered crypto lending products, while BlockFi was fined $100 million in February for offering unregistered crypto lending products.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.