Crypto.com Review – App, Card, Earn, and Referrals

June 30, 2020
105 Comments
by Don L

Updates

Crypto.com (CDC) changes things up (promotions, earning rates, staking levels, …) at a quick pace, so as a warning the deal you have today may be gone tomorrow.  The following are some recent updates:

November 2020 Update

Referral Program Devaluation

The referral bonus has dropped from $50 on both sides (referrer/referee) to only $25 on both sides [source]

CRO Devaluation

The value of CRO has dropped significantly ($0.08566 on 2020-11-01 [this is about half of its value in early August]).  Of course this is a big loss if you invested heavily in the CRO token.

However, it did temporarily make the card a better deal.  [As noted by Kno010] the total value of the referral program (both sides referrer/referree) was enough to cover the full cost of the Ruby card.

This didn’t last long as Crypto.com devalued the referral program as noted above.  They also devalued CRO [per CuddleBunnies_ logic] by increasing the staking size for the cards:

Cashback Clawbacks

There have also been reports of cashback clawbacks (link #1, link #2) for various categories of debit card spend.

August 2020 Update

MCO Token Being Eliminated

Crypto.com is eliminating the MCO token and requiring a swap from the MCO token to the CRO token.  The coin swap must be completed by November 2, 2020.

  • The conversion price was based on the average USD price of the two tokens over the last 30 days, 1 MCO will convert to 27.6439 CRO
    • If you swap before September 2, 2020 you will receive a 20% bonus, 1 MCO will convert to 33.1726 CRO
      • But the 20% bonus is placed in a 3 month Earn Deposit (locked and earns interest).
  • The card benefits are now based on CRO staking levels [note these staking levels are now out of date]

    • (As of 2020-08-04) CRO trades at $0.169518, so a 1,000 CRO stake would cost $169.52
  • All MCO values must be replaced with CRO values in the post below, including the referral program which is now $50 in CRO

Special Warning Section

Cryptocurrency purchasing/staking is a risky endeavor where you could potentially lose your whole stake/investment.  We tried to outline some of the risks here, but please don’t consider this post as any form of advice.

Some Crypto.com (CDC) products may be even riskier than the average risky cryptocurrency deal.  CDC is a small, private, foreign company that provides limited transparency into its financial condition.

All that said, Crypto.com has successfully launched a number of products, some of which may be of interest to some members of the DoC Community.

Overview

Crypto.com (CDC) offers a lot of products, it’s sort of its own crypto ecosystem.  We’ll take a look at a few of their products:

  • App [Crypto Purchasing App]
  • Cards [Reward Debit Cards]  (requires App)
  • Earn [Crypto Interest Earning Account]  (requires App)

And save the rest for another day: Credit [borrow money with crypto collateral], Exchange [crypto trading exchange], Invest [crypto robo advisor], Pay, ….

App

The CDC App is a cryptocurrency app that allows you to purchase, sell, send, and receive cryptocurrencies.

BG50 Referral Program

DoC Community Referral Page | Direct Link

[Important Note: The referral program is now only worth $25, the calculations below are based on the old $50 program]

The App is marketed with a referral offer:

Sign up through a referral link and complete KYC to earn $50 USD equivalent of MCO tokens when you stake 50 MCO tokens for 6 months.

BG50 FAQ

(Trying to) Value the Referral Bonus

The BG50 referral offer is more complex than a lot of the referral offers that we come across, let’s see if we can get some sense of its value.

The current price of an MCO coin is $5.19 (@2020-05-10), so to stake 50 MCO we would need to invest $259.50 (50 MCO x $5.19/MCO).

As soon as we buy our 50 MCO stake, the $50 bonus is unlocked, so that’s nice to have, but our $259.50 is locked in MCO tokens for 6 months.  And cryptocurrencies (including MCO tokens) are quite volatile, the price might go up, but it could also crash (even die completely).

It would be nice if we could purchase an option to sell our MCO tokens in six months at a price that would allow us to lock in a portion of the bonus today.  Unfortunately, I don’t know of an exchange that offers this option [but I’m not a crypto trader, if anyone does know would be very interested to learn about it in the comments].

Without a market to buy an option to hedge our risk, maybe we can still estimate what the cost would be.  I downloaded the last 6 months of daily closing prices for MCO from CoinMarketCap and then fed them into a historic volatility calculator to get a 91.53% annualized volatility number (in comparison downloading the same six month period for SPY [S&P 500] returned a 43.4% number).  I plugged the 91.53% volatility number into a Black-Scholes option calculator (6 months [0.5 years], $5.19 spot and strike price, 0% risk free rate) and got a put price of $1.23, for a total cost of $61.50 ($1.23/MCO x 50 MCO).  That’s pretty costly, if the Black-Scholes model is appropriate (and if I did the math correctly), it would cost us more to lock in the bonus than the bonus is worth!

So that gives me pause, our investment is risky, to risky for an arbitrage trade.  It might still be a value trade (as we are getting a large discount on MCO tokens with the bonus) if we have some confidence in the stability/growth of the CDC platform, but we’ll definitely have to accept risk.  Maybe we can get more value from our investment (see the Cards section below).

[Expired] No Fee Credit Card Purchase Promotion

CDC is currently running a promotion:

The 3.5% credit card purchase fee is waived for crypto purchases through June 2020 extended through September 2020

Waived Fee Post

(Just like you) I instantly had visions of earning many points and miles for free [and with no need to haul those US Mint coins back to the bank, I could just sell my USD stable coins from home 🙂 ].

But for US users it seems like this promotion is almost impossible to take advantage of because there are so many barriers:

  • Many (if not all) US credit cards are blocked
    • By the App,
    • By the payment network,
    • By an unimplemented security feature (like 3DS?),
    • or by the card issuer
  • If you can get past the block it looks like even the pre-auth may flag as a cash advance
  • And your card will also be liable for foreign transaction fees (if applicable)

I think if you could get something working, you definitely will have found a unicorn [if interested, I collected a few data points from r/Crypto_com in this Google sheet]

Some mention using Apple Cash to load, and others have had success with the Charles Schwab or SoFi debit cards to avoid foreign transaction fees.  ACH should also work with no fee.

App Notes

  • (Spread) CDC advertises the App as a place to purchase crypto at true cost, but I’m not sure you’re getting the best price.  Seems like a lot of reports of fairly large spreads when buying/selling within the App.  The workaround often mentioned is to purchase MCO through an exchange.

Cards

CDC offers a range of Visa debit cards (based on your CRO stake size), here’s the summary graphic:

CDC Cards Page

The most interesting part to me is the cashback rate on the debit cards.  A no-stake (no investment) version of the card earns 1% back, while a 50 MCO stake (as part of the BG50 referral program) earns 2% back.

Important Cashback Notes:

  • The cashback is provided in MCO Tokens.  They note the cashback is credited instantly on purchase, but the value of the cashback will float with the price of MCO until you sell your tokens.
  • While cashback is provided on all debit card purchases (assuming PIN based too), the terms specifically void cashback on the following purchases:
    • MCO Rewards are paid in MCO Token to your Wallet App. Transactions on digital wallets, digital banking services, crypto exchanges, stored value products, money remittance services are excluded from the MCO Rewards programme.
  • The debit cards are prepaid cards and CDC’s banking partner in the US is Metropolitan Commercial Bank
  • There are monthly purchase limits based on card tier (sorry they are not listed online)
    • It is currently a $15,000 monthly POS spend limit on the no stake card and a $25,000 monthly POS spend limit on the staked cards
    • All the limits are available within the Fees & Limits section of the app

The cards provide other benefits (Spotify, Netflix, …) depending on the staking level as highlighted in the graphic.  More detail on the benefits is available here:

Visa Card Benefits

The cards come with no setup, shipping, monthly, or annual fees.  [If you close the card it’s recommended to first drop your balance to zero]

(Trying to) Value the Debit Card Cash Back

Doing the BG50 referral program and staking the 50 MCO qualified me for the 2% cashback debit card, if I ignore the MCO stake and the bonus:

  • Just on debit card cash back I could get to breakeven with about $12,500 of spend ($250/0.02)

If I did a more thorough analysis, I might take into account

  • Opportunity cost of the spend.  [My plan is to add additional spend that I wasn’t previously going to complete and hopefully won’t be to difficult to do (but not too much)]
  • The price movement of the MCO tokens.  [I’ll try and cash out regularly] [DC notes minimum cash out at 4.5 MCO]
  • Any spread when selling the MCO tokens

[Expired] Special Measures Promotion

As part of the special measures promotion through June 2020 extended through September 2020.  CDC is offering additional cashback on food and grocery spend:

  • 5% up to $25 per month on the no stake card
  • 10% up to $50 per month on the staked cards

[IKS notes that Walmart purchases are not automatically receiving the 10% back]

Earn

Earn is CDC’s interest earning account for crypto deposits.  These are the current rates:

Earn FAQ | Earn Page

Important Earn Notes:

  • Interest in paid in the same currency deposited (BTC -> BTC, USDC -> USDC, …)
  • Interest is simple daily interest (not compounded) paid weekly
  • There are minimums and maximums detailed in the FAQ

(Trying to) Value the Earn Product

When comparing the Crypto.com Earn product apples to apples to other crypto interest earning accounts, Earn offers worse rates – only 6% (on stable coins for instance) vs. the current 8%+ rates on other platforms (like BlockFi and Celsius) for the same flexible (withdrawal whenever you like), no staking required account [not even taking compounding into account].  [We looked at Crypto Interest Earning Accounts in this post]

But the Earn product does offer value by providing longer dated term options (which allows you to lock in a rate for a longer duration).  It could also provide another valuable option to diversify your crypto investment, and if you can get value from the higher stake sizes.

More Information

Company Information

Tax Notes

Geographic Restrictions

Within the US, the Crypto.com App is available in every state except NY.

But some Crypto.com products and traded cryptocurrencies are not supported in all states.

My Experience

My Plan

  • Use a referral and stake the 50 MCO to qualify for the referral bonus
  • Experiment and try to earn a decent amount of 2% cashback with the Ruby Steel debit card each month
  • Experiment and diversify my crypto investment with the Earn product

My Process

  • I clicked on a referral link, downloaded the App to my phone, and added the referral code on initial launch
  • The KYC process required my name, email, phone, driver license, and a selfie picture
    • The App mentioned a verification process of 2-3 business days, but I was actually verified in just a few minutes
  • I had some issues clearing fraud alerts on a Visa debit card that I attempted to use to purchase my initial 50 MCO stake, so I kicked off on an ACH transfer (which required address and SSN)
  • But then I woke up and remembered that this was crypto, no need to clear fraud alerts or wait days on ACH transfers – I simply transferred crypto in and traded for MCO tokens to stake the card.  So now I’m just waiting to receive the Ruby Steel (2% card).  [SSN and address also needed for the card]

Our Verdict

This deal has more risk than a lot of the deals that we see, and many of the CDC promotions are probably less valuable than they might first appear.

But for me personally, I thought there was enough value to give it a go.  Limiting my risk wherever possible by minimizing my stake, and trying to grab value from multiple CDC products.

Please no referrals in the comments of this post, but feel free to share them in this attached DoC Referral post.

All the Best!

History

  • Update 11/01/2020: November 2020 Update Section
  • Update 09/18/2020: Added updated card documentation with 5% and 8% back tiers
  • Update 08/04/2020: Added August 2020 Update Section
  • Update 06/30/2020: The special measures promotion has been extended an additional 3 months [through September 2020].  Probably most valuable for the 5-10% rebate of up to $25-$50 in credit on grocery, restaurant, and food delivery per month.  But possibly more valuable if you found something special with the credit/debit card fee waiver. (HT: Evan)

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