Cryptocurrency platforms reporting billions in daily trades on CoinMarketCap have been accused of misleading their customers regarding their crypto licenses, according to an investigation conducted by Cointelegraph. One such platform, Bitspay, which claims to have $1.4 billion in daily trades, initially stated that it held a license and was regulated by Estonia. However, when Cointelegraph reached out with questions about this license, Bitspay promptly removed the information about its license from its website.
At the time of writing, Bitspay is the fourth-largest cryptocurrency exchange in terms of daily trading volumes on CoinMarketCap, following platforms like Binance, Bitforex, and Topcredit. CoinMarketCap data shows that Bitspay is a centralized exchange (CEX) based in Estonia, operating under the regulation of Estonian authorities for Anti-Money Laundering and Countering the Financing of Terrorism regulations. However, it was discovered that Bitspay did not hold a valid license in Estonia, as claimed. The company’s previous announcement referred to an Estonian company called Globe Assets OÜ, and the license was valid for less than a year.
Bitspay was displaying its license information on its website, Bitspay.io, until September 18, 2023. Shortly after, the platform rebranded its website as Bitspay.global and removed all information about being registered or regulated in Estonia. The company’s CEO, Kelly Nova, stated that they were working on obtaining licenses in both Estonia and the United Kingdom but did not provide further details about the changes or the previous false claims.
Bitspay is not the only platform with questionable licenses and little information about its founders and background. Other platforms like Topcredit and Bika, reporting massive daily trade volumes on CoinMarketCap, have also refused to disclose information about their background and founders when approached by Cointelegraph. CoinMarketCap acknowledged the issues with self-reported data but stated that APIs are the only viable source for data collection. The website encourages users to perform their own due diligence, especially with low scoring exchanges, and admits that its data is not infallible.
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Criticism has been raised against websites like CoinMarketCap for providing inflated exchange trading volumes. In 2019, Bitwise Asset Management revealed that 95% of volumes on unregulated exchanges reported on CoinMarketCap were fake or non-economic wash trading. A separate investigation by The Tie in 2019 suggested that over 86% of reported crypto trading volume appeared suspicious.
CoinMarketCap’s major rival, CoinGecko, has not listed Bitspay or the other platforms mentioned above. However, CoinGecko has significantly more spot exchanges listed compared to CoinMarketCap. Despite the discrepancies, CoinMarketCap stands by its data and emphasizes that its role is to provide objective and comprehensive information, rather than regulate the industry.
The issue of misleading trading volumes and questionable licenses undermines the credibility and transparency of the cryptocurrency industry. It highlights the importance of conducting thorough research and due diligence when dealing with cryptocurrency platforms and exchanges.
