Coinmarketcap (CMC), the web’s most popular cryptocurrency tracker website, has responded to accusations that it is implicit in supporting wash trading. This week, a platform called Crypto Exchange Ranks published detailed allegations of how CMC incentivizes exchanges to report fake volume. In a new blog post, Coinmarketcap has detailed its determination to support “transparency and clarity”.
Coinmarketcap Cleans Its Shop
As news.Bitcoin.com reported yesterday, Coinmarketcap has been taking flak for blindly publishing suspicious data from certain crypto exchanges. The exchange at the center of the furore on this occasion was a little-known platform called Bitforex that virtually no one had heard of until recently. Through wash trading – simultaneously buying and selling on its own platform to create the illusion of high volume – Bitforex managed to leapfrog into the top 10 according to CMC’s rankings.
Following the story, Coinmarketcap has hit back with a blog post detailing its determination to clamp down on such behavior. It identifies three issues that have been brought to its attention: fee-free/transaction mining models, low fee models, and artificial volumes/wash trading. In regards to the latter, it explains: “In order to ensure that their listings remain active on certain exchanges, sometimes projects are instructed to maintain a minimum level of volume. This causes projects to heavily employ market making services and bots to trade their own coin to inflate their volumes.” It adds:
Even though we try our best to verify the data with the exchanges on our site, we are not in the practice of censoring or policing others. In an open ecosystem like the one we are in, we believe that the best policy – that we follow closely – is to over-provide on data and let users make their own informed choices about what to do with that data.