Coinmarketcap Charged with Providing False Data
July 20, 2018
Bitforex, a crypto exchange, that until recently was included in the top-100 by trade volume, was accused of making fake deals at large scale. Crypto Exchange Ranks, that takes data from API exchange, has published a report to accuse Bitforex of generating fake trade volumes and Coinmarketcap of being involved in scam activities.
Fake trade volumes, i.e. orders for purchase and sale to produce fallacious impression of demand and liquidity, are the keynote in the world of cryptocurrencies. Since the notion of crypto exchange was introduced, various companies have been charged with fake trading and volume blowing. Though it may sound rather harmless, it may have serious effects on traders.
This attracts traders to get registered at the exchange which can turn to be unsafe, risky and far less liquid than it may seem. Until lately Bitforex had been unpopular platform ranked 70th by trade volume in the world. Now it reached 12th position, according to Coinmarketcap, with daily volume of $227 million.
The detailed and convincing report by Crypto Exchange Ranks describes how Bitforex makes fake data. Meanwhile, Bitforex trade volume has risen almost 100 times over the last weeks and now exceeds that of many popular exchanges like Kraken and Kucoin almost 10 times.
Bitforex claims in its Twitter biography it was granted EU license yet without any proofs, but in fact the exchange website says the platform was licensed at the Seychelles and Philippines. Along with that the site reports bold facts like 1.8 million users, 15,000 new users a day and $1.5 billion of trade volume.
Crypto Exchange Ranks, however, denies Bitforex claims and says:
“We see that the number of UU [unique users] of BitForex is 29K. In turn, Kucoin has 889K unique users. Kraken has 666K unique users».
“As we have already discovered through SimilarWeb, the exchange receives the bulk of the new traffic through the referral source – CoinMarketCap; thus, the platform immediately attracts attention. Here’s the explanation: creating and implementing marketing and communication strategies and building a community in an organic way is more expensive than forging trade volumes”.
Of course, Coinmarketcap is unlikely to be the only accomplice to Bitforex when publishing the figures provided by the exchange. With its crappy web-design, poor English and fake data Bitforex does not inspires confidence. But until Coinmarketcap takes steps to handle the egregious fake, the exchange will continue making use of the system luring gullible traders who want to test the new platform.