Crypto exchange giant Binance recently acquired CoinMarketCap, which is a move that shocked the crypto community. Before this acquisition, CoinMarketCap claimed the real adjusted trading volume of the exchange is about 30% of what the exchange claims.
With this, many people are wondering whether an exchanger could be able to run a crypto data site without bias. Many are being skeptical regarding CMC’s level of objectivity as it’s now being owned and managed by an exchange.
Inconsistency in reports
Before the acquisition, Binance claimed that its 24-hour trading volume is about $4 billion. However, CoinMarketCap disputed the claim, stating that the real amount is one-third of what the exchange claims. According to CoinMarketCap, the real 24-hour trading volume of the exchange is about $1.3 billion.
CMC has often been the subject of many criticisms, as many believe that most of its reports on trading volumes are not real. But after heavy disapproval, the platform decided to adjust the volume. This came after BitWise revealed that about 95% of crypto trading volumes are not real.
Even after this BitWise has proved this fact, BeInCrypto reported that CMC is still listing many exchanges with fake trading volume.
Concerns of bias in trade volume reports
With the acquisition of the platform, such data is now put into question. Many people think the exchange could use the portal to its advantage. Binance could use the crypto data to influence reporting and falsify its trading volume figures. It could even be the main reason why Binance bought the portal, according to some cryptocurrency observers.
Regarding falsifying trading volume, Binance may not be the biggest offender. It’s a tradition that has been in the cryptocurrency industry, as many have been accused of reporting fake trading. But Binance is receiving the highest criticism because it’s a cryptocurrency exchanges and any activity within the exchange can have an impact on investors’ trading decisions.
As a result, Binance has been criticized for inflating trading volume more often than other exchanges. However, the exchange hardly ever comments on the concerns, but it has continued to maintain that the trading volume reports are genuine.
Observers believe Binance would keep the reports from CoinMarketCap as honest as possible. But the huge $400 million spent to acquire the platform is an indication that Binance does not intend to stand-by and watch things unfold naturally.
Since the crypto data site is one of the major places where millions of users can check crypto prices, some observers say Binance may have an agenda to use the site to its advantage.