CoinMarketCap Chief Talks Steps to Remove Exchanges With Fake Trading Volumes, an Industry Wide Problem
Can CoinMarketCap (CMC) continue to be our go-to site in order to understand the crypto market? After a recent report published by Bitwise, which affirmed that 95% of all the Bitcoin volume in the market was actually fake, a lot of people are dismissing CMC as a valid way to measure the market.
This made people call CMC to be unreliable and to affirm that it was lying in its information because it reported fake volume as well. These claims put CMC on the spotlight as the crypto community decides whether to keep trusting on its information or not.
During a recent video interview, a representant from CMC, Luke Wagman, talked about the issue, which he affirmed that it was an industry-wide problem, not really a specific CMC one. According to him, there is simply no easy solution for a problem this big.
He affirmed that the goal of CMC was always to “over-provide” information and that, by seeing the whole market, the users could take their own conclusions. They would give them more control and they could do whatever they wanted with it.
This was, in his vision, a fairly good step. He affirmed that if they started policing exchanges, they would be met with criticism from the exchanges and the public and that this has not really changed after the Bitwise report.
Delisting exchanges with fake volume would not really solve the problem, in his opinion, especially because no one else is doing it. The competitors would just continue listing them and then CMC would look less complete than its competitors. This would make it an inferior source of information.
Users can still use their own knowledge to access the information and take their own conclusions, the company affirmed, you “can’t just nuke it from the website”.
What the company is doing is to start the new Data Accountability & Transparency Alliance (DATA) initiative, which will address the issues of fake volume. This way, people will be even more informed, not less informed and no one will be delisted.
As part of this new initiative, all companies will have 45 days to send their live trading data to determine several specifics like order book depth, liquidity and spreads.