As per reports, Crypto.com has given users from restricted countries until March 15 this year to repay their crypto loans. In addition, the firm recently updated its list of restricted countries adding the United States and the United Kingdom along with 38 others. Users from European nations like UK, Germany and Switzerland have shared emails regarding the loan closing ultimatum. In addition, some users who do not have any pending loans from Crypto.com have reported receiving such emails.
Under the new policy, it has been declared that if loans are not repaid by March 15, the firm will sell collaterals for closing the loan positions. Crypto.com refrained from making any comments on the issue. Its customers are left in disbelief at the sudden policy change. Some speculate that regulatory clampdown could be the potential reason behind this decision. On the other hand, many users claim that Crypto.com’s recent expenditures on promotions and marketing are taking a toll on its balance sheet.
Crypto.com’s aggressive marketing over the past year has raised many eyebrows, as Crypto.com has not raised much capital from investors, unlike most crypto unicorns. Instead, the marketing expenditures include millions of dollars in celebrity endorsements and buying arenas. As a result, Crypto.com’s marketing budget has always been a topic of discussion on the internet. However, recent developments have made this theory even more prominent.
Crypto lending and borrowing platforms have been under regulatory scrutiny for well above a year now. Several crypto firms have already received security violation notices from respective state regulators. Furthermore, 2022 started with Celsius Network and Gemini coming under investigation of the U.S. Securities and Exchanges (SEC). Furthermore, BlockFi was also slapped with a record $100 million penalty for its unregistered yield generating products. Nexo also paused its high-yield products for U.S. users in response to such regulatory actions.