CoinMarketCap forced to revamp exchange listing following data manipulation controversy
Cryptocurrency price tracking website CoinMarketCap.com (CMC) had recently come under fire over its alleged role in “wash trading.” In a recent blog post, CMC has defended itself against claims that it was incentivizing exchanges for reporting fake volumes. Everyone’s go-to crypto price tracker went as far as changing its exchange listing criteria.
In its July 19th blog post, CoinMarketCap blamed “market makers or bots” for exchange volume inflation, while reiterating that data transparency and clarity were its top priorities.
“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,” the post read.
CMC clearly wants to remain everyone’s favorite price checking resource, as it has completely removed the volume requirement for exchanges. The very requirement was earlier encouraging crypto exchanges to fake their volumes by employing transaction bots.
“Due to the recent changes in the exchange landscape, and the concerns aired by our community, we have removed the volume requirement for exchanges. This went into effect on Monday this week,” CMC said in its blog.
“The removal of the limit is partly to combat the impression that volume is the only requirement that is necessary for listing on CoinMarketCap. In fact, our team spends time researching new coins and exchanges to ensure that they are real projects, backed by real teams, and are not fraudulent, before putting them on CoinMarketCap. We are extremely conscientious about giving all exchanges and coins/tokens accurate representation on CoinMarketCap,” it added.
The website entirely distanced itself from volume data manipulation allegations by listing out some loopholes in the the way crypto exchanges function. CMC said that “Fee-free/Transaction mining,” “Low fee” and “Artificial trading volumes or wash trading” models adopted by crypto exchanges were responsible for the whole data manipulation fiasco. Crypto exchanges using these models try to maintain minimum trading activity by rebating users with their own coins.
Apart from removing the minimum volume requirement, CoinMarketCap has added more filters and toggles for users so that they can search for exchanges, which are more relevant to them.
Even with all the above measures in place, CMC doesn’t think that the issue can be resolved entirely, given the open and fast-changing nature of the ecosystem. However, it is planning to arm its users with more data so that they can make informed decisions.
“Our team spends time researching new coins and exchanges to ensure that they are real projects, backed by real teams, and are not fraudulent, before putting them on CoinMarketCap….(but) 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,” the CMC blog concluded.
Image via reddit
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