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One of the most necessary means for crypto investors or just crypto enthusiasts is objective and accurate measurement tools that can paint a reliable picture of the different elements in the field. One extremely popular website that offers such a picture is CoinMarketCap, but recently it was revealed that the site’s data had probably been manipulated.
In a thorough and meticulous article, Crypto Exchange Ranks elaborates how the crypto-exchange BitForex managed to insert itself into CoinMarketCap’s top rankings by falsifying its daily trading volume. This manipulative scheme had assisted BitForex to raise its traffic from CoinMarketCap significantly on the expense of other crypto-exchanges that didn’t partake in these kinds of deceptive strategies.
Crypto Exchange Ranks has found that despite the fact that BitForex has decidedly less unique visitors than other more established exchanges such as Kucoin and Kraken, somehow its 24-hour trading volumes exceeded both dozens of times over. Moreover, BitForex’s community on the social media is much smaller than those of other crypto-exchanges, which is another strong indication of the scheme.
It appears, then, that BitForex had generated fake trading volumes, which had slyly boosted its CoinMarketCap’s ranking; in turn, the mendaciously-obtained top rankings had drawn the attention of real visitors in CoinMarketCap who had not been aware to the subterfuge and consequently had visited BitForex as a result.
Crypto Exchange Ranks’s study concludes:
BitForex has no wide, active, and loyal community in social networks that could ensure such a high trading volume. Therefore, it stands to reason that driving up fake 24h trading volumes is a more effective marketing technique than the fair nurturing of the users base through wide media presence and community management. This approach grants a platform a constant influx of high-quality referral traffic from CMC and avoids spending tangible budgets on paid advertising and PR, community building, and maintenance.
To truly comprehend the story, it’s vital to understand the significance of a high-ranking on CoinMarketCap. According to Alexa, CoinMarketCap is ranked as the 280th most visited website in the world, which is massive; the site’s global rank on SimilarWeb is equivalently impressive as the 512th most popular website worldwide. With this sort of enormous popularity, it is not a coincidence that there is a fierce battle between crypto-exchanges to rank higher on CoinMarketCap. This time, it seems, one of the teams decided to play dirty.
After the explosive report of Crypto Exchange Ranks, CoinMarketCap had to react since it hurt not only the reputation of BitForex, but also its own – users would like to receive the most precise portrayal of the crypto world as possible without manipulations that alter the data.
CoinMarketCap, therefore, posted a new blog post by its VP of Marketing Carylyne Chan (CarylyneCMC) in which she acknowledges the recent concerns regarding volume trickery on the site. She further adds that as of Monday July 16th, the site has removed the volume requirement for crypto-exchanges.
The removal of the limit is partly to combat the impression that volume is the only requirement that is necessary for listing on CoinMarketCap. In fact, our team spends time researching new coins and exchanges to ensure that they are real projects, backed by real teams, and are not fraudulent, before putting them on CoinMarketCap. We are extremely conscientious about giving all exchanges and coins/tokens accurate representation on CoinMarketCap.
In addition, the site will add more features and metrics so users will have more control on the data they choose to see, and it will also make it more difficult to manipulate it.
Will it be enough? Doubtfully. In an ever-changing world, manipulations and scams persistently evolve as well, and the battle for real, truthful and accurate data is a constant never-ending race. Hopefully, the good guys will be in the lead more often than not.