A recently published Forbes report found that CoinMarketCap continues to list exchanges that are known for providing fake crypto trading volume. Does this mean CoinMarketCap has given up on providing reliable data to investors?
Fake Volume and Wash Trading Persist
In early 2019 two separate research reports from Bitwise Asset Management and Alameda Research found that 65% to 95% of all reported cryptocurrency trading volume is manipulated or completely false. In spite of this, a close look at CoinMarketCap shows the cryptocurrency price and volume site still listing exchanges known for volume manipulation and wash trading.
In fact, of the top 25 exchanges listed on the site, roughly 75% are accused of reporting manipulated trading volume. This is concerning as CoinMarketCap is the primary website used by the majority of cryptocurrency traders.
When Bitwise’s seminal study published in March, CoinMarketCap joined the discussion and admitted that there was room for improvement.
CEO Brandon Chez also admitted that fake trading volume “is an important issue, and we’re actively trying to solve it.” According to estimates from Forbes, CoinMarketCap currently employs a 40-person team, inclusive of six data scientists, and the platform easily earns $20 to $30 million per year in advertising revenue.
CoinMarketCap says: ‘We’re working on it’
CoinMarketCap appears to lack a sense of urgency in addressing this issue and proof of this comes from a recent Forbes report published four months after Bitwise released its report. The report detailed how BKEX cryptocurrency exchange falsified trading volume by copying trading volume from Binance. Even though the Forbes report published on July 2, 2019, CoinMarketCap has yet to address the issue.