Cronos blockchain stopped and rolled back after exploit in Crypto.com-backed Tectonic

The Cronos blockchain, backed by Crypto.com, was forced to stop and roll back its history this week to halt an ongoing theft tied to the Tectonic protocol, which Crypto.com had promoted for months.

Tectonic advised users to stop using its protocol entirely. PeckShield initially estimated the stolen funds at about $74 million.

Crypto.com provided one of the biggest retail entry points for Tectonic, the newly hacked protocol that came close to draining tens of millions from Cronos' DeFi ecosystem. As worry over the exploit spread, the CRO token of Cronos fell 6% in the previous 24 hours.

The Crypto.com exchange, run by Kris Marszalek, promoted TONIC purchases via over 20 fiat currencies. It also marketed spending TONIC on Visa cards at 80 million merchants.

Crypto.com listed TONIC for trading on its main platform, advertised annual staking returns of up to 100%, and promoted staking rewards inside its DeFi Wallet.

A guide from Crypto.com's Earn program gave step-by-step instructions for staking TONIC, noting its "automatic compounding" of "earnings."

The Crypto.com DeFi Wallet further simplified TONIC staking with one-click access and no lock-up periods.

Tectonic's oracle page shows just two sources for TONIC's USD price: VVS Finance and – unsurprisingly – Crypto.com.

Crypto.com's Cronos blockchain stops and wipes history

Following an exploit on Tectonic on Sunday, the Cronos blockchain, which is backed by Crypto.com, ceased block production. Validators removed part of the chain's history by rolling back to the state before the exploit and then restarting block production.

Tectonic's litepaper highlighted its ties to Crypto.com and named Particle B as its incubator, later rebranded as Cronos Labs. Crypto.com's $500 million investment arm is described as a "strategic partner to Cronos Labs."

Researcher Weilin Li called the TONIC exploit a Mango Markets-type price manipulation attack that allowed the hacker to withdraw real collateral from DeFi lending protocols by artificially pumping the price of TONIC.

While the Cronos EVM blockchain from Crypto.com claims to be "permissionless," its official FAQ states that its 33 validators operate by invitation only. Applications for validator status are not open.

Total value locked in Cronos DeFi protocols has dropped 92% since 2022.

This is far from Crypto.com's first controversy. In 2021, Cronos "permanently" burned 70 billion CRO tokens to create scarcity and pump its token price. But in March 2025, it passed a community vote – leveraging its own validator majority and facing strong opposition – to re-mint those 70 billion tokens into a "Cronos Strategic Reserve," restoring supply to 100 billion and effectively benefiting Crypto.com.

In practice, Crypto.com exerted control over the Cronos Strategic Reserve, as the exchange and its related validators held majority governance on the Cronos chain, which set the reserve's terms. Prior to February 2022, CRO tokens were called "Crypto.com Coins."