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Coinmarketcap changes ranking of cryptocurrency brokers after being bought by Binance

Cryptocurrency

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CoinMarketCap changed its exchange rating system just over a month after being acquired by Binance for $ 400 million. The new system now puts Binance first – and removes previous figures that suggested the exchange was used for wash trading.

The new system classifies exchanges by web traffic. "Instead of asking brokers to send their user numbers, a good proxy will be web traffic," said CoinMarketCap. It is now the standard metric for ranking exchanges. He places Binance at the top with a score of 1,000, followed by Coinbase Pro and BitMEX.

"We listen. Coinmarketcap updated the exchgang rankings to incorporate the web traffic factor. Check the update ranking at the URL below and let us know what you think ”, tweeted yesterday Binance's CEO, Changpeng Zhao.

As CoinTelegraph pointed out, CoinMarketCap's chief strategy officer and interim CEO, Carylyne Chan, said in an interview last year: “We saw other people doing things like you said, web traffic as a way (to see if exchanges are legitimate), but people trade using API keys and that’s why web traffic isn’t a good indicator “.

Binance is now ranked at the top of CoinMarketCap under the new metric. Image: CoinMarketCap.

CoinMarketCap removes wash trading indicator

But the data provider not only changed its position on using web traffic, but also removed an indicator created in July 2019, designed to provide more accurate data and eliminate wash trading.

At the time, CoinMarketCap CEO Brandon Chez told Forbes that the volume of fake deals "is an important issue, and we are actively trying to resolve it."

On April 3, the day after Binance acquired CoinMarketCap, the exchange was ranked 15th on the website. The data provider listed the volume claimed by Binance as $ 6.7 billion. But it put its adjusted volume, a metric designed to remove any suspicious activity, at $ 2.1 billion.

“Adjusted volume is a way to view all exchanges, excluding data that is distorted (very different from other exchanges) or potentially suspect. That way, you can think of the adjusted volume as a way to provide a more detailed presentation of the data and the reported volume as clearly what the exchanges provide us through its API, ”explained CoinMarketCap.

But that metric is over. The original metric, including wash trading and “potentially suspicious” data – according to CoinMarketCap – is the only one that remains. Here too, Binance is at the top.

Why is the top important?

Being ranked at the top is important for exchanges. A Bitwise report claimed that up to 95% of exchange volumes are fake, as they trade to increase volumes – and move up the rankings.

Increasing numbers on exchanges is big business. Alexey Andryunin, 20, a sophomore at Moscow State University, charges his 30 clients $ 15,000 to counterfeit trading volumes for them. Although he is increasing the volume of token projects and not exchanges, he claimed that they are aware of what he does and make no move to contain it.

Exchanges even pay to be listed in the sponsored spaces at the top of the rankings, instead of having to increase their own volumes to reach a higher position. Cryptocurrency news site BeInCrypto, for example, lists the cryptocurrency exchange Stormgain in a sponsored space at the top of its ranking, despite the fact that the exchange has much smaller volumes than those below it.

Fundamentally, the main point is important because it increases brand exposure and makes it appear to be the most popular, thus attracting new customers. These new clients not only pay trading fees and withdrawal fees, but also increase trading volumes – placing the stock market even higher in the ranking and attracting more customers. A virtuous – or vicious circle.

* Translated and republished with authorization from Decrypt.co


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This source of this article is portaldobitcoin.com.

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