Coinmarketcap to Revise Exchange Listing Method Amid False Data Charges
July 23, 2018
The largest website for monitoring cryptocurrency rate and trade volume Coinmarketcap will alter significantly the exchange displaying method. The step was caused by recent accusations in trade volume fake data cast at the service which made some exchanges seem to be more liquid that they actually were.
The Coinmarketcap marketing vice president Carylyne Chan published a statement on July 19 to assure that transparency and authenticity of data are key principles for their website. As she put it, the service takes every possible effort to make sure that API from exchanges reflect the most sound and latest data. Yet she points out that several factors beyond their control may influence the accuracy of data.
Chan drew up three factors that affect the data:
- Mining via transaction model: some crypto exchanges have issued native tokens that get mined every time a transaction is performed. CMC stresses that this may lead to artificial trade volume growth as users sell and buy cryptocurrency back and forth to gain more tokens with random use of bots.
- Low commission fees: some exchanges have set extremely low commissions to encourage trading. Along with that commission size often depends on account type and CMC does not get this data.
- Fake deals: to maintain minimal trade volume some exchanges resort to market making services and trade volume boosting bots.
Coinmarketcap assured they are aware of the problem complexity and plan to adopt some new ways for obtaining precise trade volume figures. The website will take account of variable commissions at some exchanges as well as other criteria for ultimately transparent data.
Note that this was not the first scandal CMC was involved in. Earlier the website published a BCH-supporting Bitcoin.com link at BTC-related page. In January the site ceased calculating data from South Korean exchanges without informing its users which made average-weighted rate of all cryptocurrencies fall and set the whole market to panic.