The Singapore-based cryptocurrency exchange has partnered with Climeworks to neutralise its carbon emissions. In 2021, Crypto.com set an 18 month target to become a carbon negative company.
The crypto industry has long been criticised for its impact on the environment, more so that climate activists are calling for a ban on energy-intensive proof-of-work (PoW) blockchains like the Bitcoin network. However, with the coming of networks like Cardano (ADA) and Ripple (XRP) that are powered by the more eco-friendly proof-of-stake (PoS) consensus mechanism, sustainability has been the name of the game in the digital asset market.
Crypto.com, a Singapore-based cryptocurrency exchange with over 70 million customers worldwide, has been incorporating climate-conscious action to its business model for a while. The company now has taken the next step in its “sustainability” and “carbon management” journey by signing an eight-year deal with Climeworks to neutralise its direct carbon emissions.
Climeworks is a Swiss company that specialises in the technology that captures carbon dioxide from the atmosphere to maintain optimal carbon balance. The firm builds air filters that can capture excess CO2 and store them underground, where it will be turned into rocks. Multinational giants like Microsoft, Stripe and Shopify have partnered with Climeworks to make use of its carbon removal services.
In 2021, Crypto.com announced an ambitious goal of becoming carbon negative within 18 months. At the time, the organisation revealed a multi-phased approach through which it committed to offset more carbon than is generated by all its activities. The first phase focused on assessing the carbon produced by Crypto.com through crypto asset trading, deposit and withdrawal services on its app, exchange, NFT, DeFi (decentralised finance), and Crypto.org Chain – the company’s own PoS blockchain network. In the second phase, or the current phase, the firm will partner with organisations specialising in carbon offsetting. The third phase will involve the company assessing carbon generated by its operations outside of cryptocurrency trading, like marketing activities, work-place services, and business travels, and incorporate the data to its carbon offsetting and sequestration program that will eliminate more CO2 than is generated. The company will audit its carbon emitting activity through a third-party auditor and provide all information to its customers and the general public.
“The climate crisis is the most pressing issue of our time. Committing to become a carbon negative company is just the beginning of our efforts. As we further invest in building out the Crypto.org Chain Ecosystem we will offer the industry a path towards clean crypto,” said Kris Marszalek, co-founder and CEO of Crypto.com
The partnership with Climeworks is aimed at Crypto.com neutralising its scope 1, greenhouse gas emissions made directly by the company, and scope 2, emissions made indirectly by the firm through other business activities, residual emissions. Crypto.com is looking at ways to reduce scope 3 emissions that come with customers’ activities outside of the platform.
In 2021, the crypto service provider released Crypto.org Chain (CRO), a highly energy efficient PoS blockchain that facilitates emission-free non-fungible token (NFT) minting and supports Ethereum Virtual Machine (EVM) compatible applications. Last year when Ethereum (ETH) was transitioning to proof-of-stake consensus, Crypto.org Chain allowed the blockchain’s proof-of-work applications to port via its EVM-compatible protocol.
After becoming a PoS blockchain, Ethereum was able to reduce 99% of its energy consumption.
In October 2022, blockchain-based payment settlement protocol Ripple (XRP) partnered with Thallo – a Web3 based carbon credit marketplace – to bolster its climate action. At the COP27 Climate Action Summit held in Egypt in November 2022, ConsenSys, the engineering firm behind popular self-custody crypto wallet MetaMask, announced the Ethereum Climate Platform (ECP), a framework built into the Ethereum network that will help the blockchain mitigate excess energy it consumed while being a proof-of-work chain.
At the time of writing, CRO, the native token of Crypto.org Chain, is trading at $0.07 – down 5.9% in the last 24 hours. The network has a total market cap of $1.9 billion.