CoinMarketCap has been a go-to website for many in the cryptocurrency space. However, it has drawn a lot of criticism over alleged fake trading volumes. According to a report published by Bitwise, around 95% of the trading volume was fake on most cryptocurrency exchanges. One crypto proponent on Twitter had even compared CoinMarketCap’s information to be as reliable as a McDonald’s ice cream machine, while others in the space called out the website for ‘lying’.
In a recent interview, Luke Wagman, the Chief Evangelist at CoinMarketCap, shed some light on his stance regarding the Bitwise report and the allegations against the website. Wagman stated,
“This is not a CoinMarketCap specific issue, this is an industry-wide problem and there is no easy solution to it.”
According to Wagman, the website sought to “over-provide” information so that users could draw their own conclusions. Wagman said that letting users evaluate the exchanges by giving them “more control” was a fair step, rather than “actively policing” exchanges, which he cited would have been met with a lot of criticism.
He further said that removing or delisting exchanges with fake trade volumes “is not the solution”. From a business point of view, removing exchanges when none of CMC’s competitors are doing the same would make the website an inferior information aggregator, he explained.
Wagman also added that despite everything, information is always relevant and users would still want to use it to “look at it and experience it”. He further said,
” .. you can’t just nuke it from the website.”
The Chief Evangelist previously clarified that solving the problem of identifying exchanges with fake and real trading volumes was not easy. In an effort to mollify the damage caused by the allegations, CoinMarketCap had announced an initiative with Data Accountability & Transparency Alliance [DATA] to address the fake trade volume issue.
As part of the collaboration, all exchanges listed on CMC were given a 45-day deadline to send live trading and live order book data to determine liquidity, order book depth, and spreads.
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