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CoinMarketCap and Crypto Briefing Introduce New Analysis Product

Crypto Briefing launching new crypto research and analysis products, Simetri to complement CoinMarketCap’s Data Accountability and Transparency Alliance initiative.

Digital currency review platform Crypto Briefing and CoinMarketCap’s Data Accountability and Transparency Alliance (DATA) are jointly launching a new crypto research and analysis product, Simetri. The organizations announced the development in a press release shared with Cointelegraph on July 9.

The institutional-grade Simetri is designed to ensure transparency and verifiable order book data from cryptocurrency exchanges, as well as provide in-depth fundamental analysis and unbiased insights into crypto projects. Simetri will be embedded in cryptocurrency profiles on CoinMarketCap’s site.

Specifically, Simetri will assess fundamental elements of a project such as its technology ecosystem, utility, development, support, and various other factors that contribute to a healthy and sustainable project. Carylyne Chan, Global Head of Marketing at CoinMarketCap, explained:

“The combination of SIMETRI and CoinMarketCap’s DATA initiative represents a positive trajectory for the standardization of crypto data. Data standardization is a key factor in ensuring we can have greater visibility into data on an ongoing basis. Trusted data sources are a cornerstone of traditional financial markets – and as cryptocurrency matures, it needs and deserves these sources.”

In May, CoinMarketCap urged crypto exchanges to disclose accurate data in a move to improve transparency of information available on the platform. At the time, CoinMarketCap declared an ultimatum to all exchanges listed, threatening delisting from the platform if they failed to provide accurate trading, volume and other relevant data.

According to a dedicated analysis from Cointelegraph released in late June, 70% of crypto exchanges reported having provided CoinMarketCap with information required to comply with the DATA initiative.

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Monero Discloses Bug Allowing XMR to be Stolen from Exchanges

One of the security vulnerabilities enabled attackers to trick exchanges into thinking they had deposited large sums of monero.

Several security vulnerabilities have been disclosed by Monero, including one that could have been exploited to steal xmr from exchangesreports on the breach disclosure platform HackerOne revealed on July 3.

The vulnerability theoretically enabled attackers to send counterfeit xmr to an exchange. Once the fraudster’s account was credited, they could then convert it into other coins and make a withdrawal, leaving the exchange out of pocket.

Describing the critical breach they uncovered, the lead developer for CUT coin added:

“It is our belief that the vulnerability cannot be used to “mint” real, transactable monero out of thin air.”

A bounty of 45 xmr (about $4,000) was paid to the developer for their efforts.

Most of the vulnerabilities recently disclosed to HackerOne were identified a few months ago, but they have since been resolved.

In April, monero developers fixed a bug concerning the Ledger hardware wallet that made it look like user funds had disappeared.

The privacy-focused altcoin is 14th in the rankings of the biggest cryptocurrencies by market capitalization according to CoinMarketCap.

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CoinMarketCap Pushes Exchanges to Transparency: Sign of Mature Market?

CoinMarketCap and major crypto exchanges are pushing to improve liquidity, strengthening the long-term growth trend of the sector.

In May, crypto market data provider CoinMarketCap requested all exchanges in the global exchange market disclose accurate data in a move to improve transparency of the information displayed on the platform. CoinMarketCap declared an ultimatum to all exchanges listed, clarifying that they would be delisted from the platform if they fail to provide accurate trading data, volume and other relevant information.

In an initiative called Data Accountability and Transparency Alliance (DATA), CoinMarketCap said that it will “review, align, and enhance reporting standards across the industry” with the objective of eliminating inflated volumes and inaccurate information from the market. The CoinMarketCap team said:

“Any exchange that does not provide this mandatory data to us via a new or updated summary endpoint will be excluded from all price and adjusted volume calculations on the site. There is a 45-day grace period for all exchanges to send this new endpoint to us, and changes will go into effect on June 14, 2019.”

The 45-day grace period has now well passed, with 70% of crypto exchanges reported to have provided CoinMarketCap with information required to comply with the DATA initiative.

Is the crypto industry on the right track?

In March, Bitwise Asset Management, a San Francisco-based investment firm founded by former executives at Facebook, BlackRock and Goldman Sachs, reported in a presentation to the United States Securities and Exchange Commission (SEC) that 95% of the reported volume in the crypto exchange market was fake.

Related: Bitwise Calls Out to SEC: 95% of Bitcoin Trade Volume Is Fake, Real Market Is Organized

The Bitwise team disclosed that only 10 exchanges, with the exception of BitMEX, have a real daily bitcoin (BTC) trade volume above $1 million, which included Binance, Bitfinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex and Poloniex.

At the time, the Bitwise team explained that, when inflated volumes were removed from the bitcoin market, the volume of the dominant cryptocurrency relative to its market cap was healthy. The firm also stated that arbitrage between the 10 exchanges had improved, indicating the formation of a healthier market structure. The report read:

“When you remove fake volume, the real bitcoin volume is quite healthy given its market cap. Gold’s market cap is ~$7 trillion with a spot volume of ~$37 billion implying a 0.53% daily turnover. Bitcoin’s $70 billion market cap would imply a 0.39% daily turnover, very much in-line with that of gold.

“Arbitrage between the 10 real exchanges has improved significantly. The average price deviation of any one exchange from the aggregate price is now less than 0.10%! Well below the arbitrage band considering exchange-level fees (0.10-0.30%) & hedging costs.”

Over the past several months, the top exchange rankings by trade volume, following the implementation of the DATA initiative on CoinMarketCap, have started to reflect legitimate volumes coming from reputable exchanges.

BitMEX, Binance, OKEx and Huobi have been ranking as the top four exchanges based on reported volume, with Binance, OKEx and Huobi also ranking as the top three exchanges on adjusted volume.

For many months, the exchange Coinbene had ranked as the top exchange on CoinMarketCap, an exchange Bitwise explicitly suspected of having artificial trade volume. In an official statement, Carylyne Chan, the global head of marketing at CoinMarketCap, said:

“We are highly encouraged after seeing strong support for our DATA initiative so far. With these submitted data points, we aim to provide more meaningful analyses and metrics for our users, and empower them with information to do their own research even more effectively.”

Over time, the crypto market will begin to reflect real volume

Currently, CoinMarketCap estimates the global crypto exchange volume to be over $100 billion, a figure that is still estimated to be substantially higher than verifiable volume in the market.

Bitwise created a methodology called the “Real 10” volume of bitcoin, with data from the 10 exchanges it identified as having verifiable volume. The Real 10 volume of bitcoin is hovering at around $3.1 billion as of June 26, according to Messari. The Real 10 volume, put together with the CME bitcoin futures market volume and BitMEX, likely surpasses $14 billion, since CME has registered over a billion dollars in daily volume at its peak in May and BitMEX has been recording over $10 billion in daily trading volume in the past month.

Even with the removal of 30% of the exchanges that failed to comply with CoinMarketCap — which the firm has not disclosed yet — it is entirely possible that exclusion of alternative cryptocurrency volume would result in the verifiable daily volume of the crypto market being less than $30 billion.

As CoinMarketCap continues to delist exchanges that failed to comply with the DATA initiative from the platform, the daily volume of the market on CoinMarketCap is expected to decline. Still, a large discrepancy between real volume and reported volume exists.

The Blockchain Transparency Institute team said:

“Initial BTI Verified exchanges include 9 of the top cleanest exchanges in our rankings. These exchanges include Coinbase, Upbit, Bittrex, Poloniex, Liquid, Kraken, Gate, Bitso, and Lykke. The largest exchanges in the United States, Korea, Japan, and Mexico are all on our initial release and we will be announcing new additions each month. All initial BTI Verified exchanges are over 90% clean with a few that are 97-99% clean including Coinbase and Upbit. Kraken was the cleanest exchange we found with these current algorithms at over 99%.”

Over time, with the launch of strictly regulated platforms in key countries like the U.S., the reported volume of the crypto exchange market will likely see less inflation, and portray real demand and interest from both retail and institutional investors.

The Commodities and Futures Exchange Commission (CFTC) approved the application of LedgerX on June 25 to operate in the U.S. market as a crypto derivatives and clearing platform. LedgerX co-founder Juthica Chou said:

“We’ve long had the goal to expand the range of customers we can serve beyond our institutional base — it’s the natural next step for us. Omni, by interfacing with our existing institutional liquidity pool, will offer retail customers a top tier experience from day one.” 

Bakkt, the highly anticipated bitcoin futures market operated by Intercontinental Exchange (ICE) — the parent company of the New York Stock Exchange (NYSE) — is expected to launch in July. Adam White, the chief operating officer of Bakkt, said on June 13 that the Bakkt bitcoin futures platform will launch on July 22 and that its launch will establish a new standard for accessing crypto markets, while also raising liquidity in the market. White said at the time:

“This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil.” 

For years, minor exchanges with restricted capital and resources had the incentive to inflate their volumes to appeal to retail investors. However, with the emergence of strictly regulated and reputable platforms, the incentive to spend significant resources in an attempt to become more compelling to retail investors has noticeably dropped.

Minor exchanges will likely not survive, increasing transparency in the market

At the start of 2019, the Financial Action Task Force (FATF), an intergovernmental organization founded as a part of the G-7, released a guideline to request crypto exchanges to revamp their internal management systems and Know Your Customer (KYC) policies to crack down on money laundering.

Already, key countries participating in the G-20 summit, including South Korea, have started the process of preparing a new bill to reflect the recommendations of the FATF.

All of the requests released by the FATF, such as asking crypto exchanges to record all transactions above $1,000, will likely not be accepted by most member countries. But, they are likely to follow the vision laid out by the FATF to strengthen Anti-Money Laundering (AML) policies.

Related: What Crypto Exchanges Do to Comply With KYC, AML and CFT Regulations

To comply with such policies, exchanges will need to appoint in-house security experts, establish better internal management systems and cover legal costs, which would generally create an impractical environment for small exchanges with small profit margins to operate in. The communique released by Japan’s Ministry of Finance read:

“Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy. While crypto-assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT). “

The G-20 explicitly said that it “looks forward” to adopting the guideline released by the FATF by the end of June, which indicates that member countries would try to follow the FATF’s guideline at maximum capacity, adding that:

“We welcome IOSCO’s work on crypto-asset trading platforms related to consumer and investor protection and market integrity. We welcome the FSB’s directory of crypto-asset regulators, and its report on work underway, regulatory approaches and potential gaps relating to crypto-assets.”

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CoinMarketCap Makes First-Ever Acquisition

Founded in 2013, major crypto prices data provider CoinMarketCap announced its first acquisition of Hashtag Capital.

CoinMarketCap, a major source of prices and volumetric data on crypto markets, has revealed plans for its first-ever acquisition in a press release shared with Cointelegaph on June 26

The United States-based company is acquiring electronic crypto trading fund Hashtag Capital in order to expand its efforts within its Data Accountability & Transparency Alliance (DATA), an initiative launched in May 2019 to provide greater transparency in crypto space.

Following the acquisition, the Hashtag Capital team will be joining CoinMarketCap to work on pricing algorithms for over 2,000 digital coins listed on its platform, as well as to develop new data offerings on the platform, the press release notes.

Brandon Chez, CEO and founder of CoinMarketCap, said that the company’s first acquisition will allow it to go beyond its “traditional volume-weighted average prices to even more sophisticated price algorithms and analyses.”

Originally established as a cryptocurrency trading fund, Hashtag Capital was reportedly working on its own solution to provide the “true price” of markets, CoinMarketCap wrote in the announcement. The company has not disclosed financial details regarding the acquisition.

According to the press release, Hashtag Capital’s team includes former engineering executive at customer service platform Zendesk, Yangbin “Wybe” Kwok, who is also a co-founder of Zopim, which was acquired by Zendesk back in 2014.

CoinMarketCap’s DATA initiative has followed controversy around the reliability of statistics on the platform, following a report by Bitwise Asset Management, which claimed that 95% of trading volumes on unregulated exchanges is likely to be fake. Since then, Bitwise clarified that those volumes do not impact the price of bitcoin (BTC).

Recently, Eos developer Block.one paid $30 million in cash to purchase a domain name for its new blockchain-based social media platform called Voice.

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Focus on Bitcoin, Not Blockchain, Crypto Entrepreneur Proclaims

The CEO of a crypto microinvestment startup says blockchain is a “broken promise,” with many corporations only embracing the technology to look “hip.”

Blockchain is misunderstood and focus should shift to bitcoin (BTC), the CEO of crypto microinvestment startup Amber wrote in an article for SmartCompany on June 25.

In the article, Aleksandar Svetski argued that many corporations are embracing blockchain to look “hip,” even though the technology doesn’t deliver on the supposed promise of eliminating middlemen while providing security and immutability.

He dismissed many of the so-called blockchain innovations unveiled by big businesses as advancements in data storage and business processes — and warned few of these improvements “will ever trickle down to benefit anyone other than large-scale organizations and their bottom lines.”

Svetski described blockchain as a “broken promise,” and asked why corporations were spending billions on new networks when bitcoin is “the most resilient digital network the world has ever seen.” He wrote:

“Bitcoin, as well as having a unique database architecture (that one might describe as blocks of data chained together) is secure and immutable because it has a currency baked into the protocol.”

He explained that the currency’s value is linked to security, with every participant in the network economically incentivized to act in the network’s interests.

Svetski added that bitcoin had managed to survive 10 years in an “adversarial environment” while becoming a network used to move trillions of dollars’ worth of value, while blockchain has become a vehicle for raising capital that has “no real-world applications in the enterprise and public sectors.” He warned:

“Blockchain will have a hard time once people realize the emperor has no clothes.”

Svetski’s article comes as BTC prices continue to rise. Bitcoin breached the $12,000 level in the early hours of June 26.

Data from CoinMarketCap also shows that BTC has achieved market dominance above 60% for the first time since April 2017.

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Bitwise White Paper: Fake Trading Volumes by Exchanges Do Not Impact BTC Prices

Following research claiming that 95% of volume on unregulated exchanges is fake, Bitwise clarified that it does not impact BTC’s price.

American crypto investment manager Bitwise released a paper claiming that fake trading volumes by crypto exchanges do not impact bitcoin’s (BTC) price. Released on May 24, the white paper is an extended version of Bitwise’s March presentation alleging that 95% of volume on unregulated exchanges is fake.

Published on the official website of the United States Securities and Exchange Commission (SEC), the new white paper is based upon the research that Bitwise Asset Management presented to the SEC on March 17, 2019, as specified in the document.

In the white paper, Bitwise reiterated the main points from the presentation released in March, including evidence that almost 95% of reported trading volumes in bitcoin by exchanges are fake or non-economic in nature.

However, the new report also proves that those fake volumes do not affect price discovery in the real bitcoin spot market. The white paper demonstrates that effective arbitrage systems keep accurate prices on real global bitcoin spot exchanges, eliminating sufficient pricing discrepancies “in a matter of seconds.”

As part of the research, the new white paper also reiterates the fact that a great number of advances and tools in the bitcoin market, such as the launch of regulated bitcoin futures, the entry of large algorithmic market makers and bitcoin custody improvements, “dramatically improve the efficiency” of BTC markets.

The research also cites data from popular crypto analytics website CoinMarketCap, arguing that the volume numbers reported by the website and other data aggregators in the industry are “surprising because they are wrong.” Bitwise state that CoinMarketCap data are “wildly inflated” by a mix of fake volume and wash trading that “dramatically skews the public’s view of the bitcoin market in a negative way.”

Earlier today, crypto media outlet The Block published its own research stating that up to 86% of total reported crypto trading volume is “likely fake,” based on correlation with exchanges’ websites traffic.

Following Bitwise’s fake volumes report in March, CoinMarketCap promised to rearrange rankings of member exchanges.

On May 1, CoinMarketCap announced an alliance called the Data Accountability & Transparency Alliance to provide “greater transparency, accountability, and disclosure from projects in the crypto space.” At the time, the firm warned that it will remove crypto exchanges from its calculations if they fail to provide obligatory data by June. Cointelegraph has recently released a follow up on the matter.

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DATA Ultimatum: CoinMarketCap Requests More Information From Exchanges to Make Market More Transparent

More on CoinMarketCap’s plan to fight fake volume reporting.

Recently, CoinMarketCap (CMC), arguably the industry’s best-known cryptocurrency market data service, announced an initiative to provide “greater transparency, accountability, and disclosure from projects in the crypto space.” The move followed recent reports on fake volume data and wash trading among cryptocurrency exchanges that were published last month.

Now, all exchanges are required to provide mandatory application programming interface (API) data to CMC by June 2019. Those who fail to do so risk getting delisted from the platform. So, can this brand new scheme cleanse the market from untrustworthy data?

Fake volume is one of crypto market’s chief problems: two reports

Recently, a number of researches highlighted the problem of fake volume among crypto exchanges, suggesting that the majority of platforms claim to handle unrealistic amounts of transactions. As explained by Changpeng Zhao, the CEO of Binance, some exchanges alter their volume to get ranked higher on popular trackers like CMC, and hence get exposure and attract new clients.

The Tie: 90% of the volume is fake, 75% of crypto exchanges look suspicious

While the problem of fake volume isn’t particularly new to the crypto market, at least two recent reports have stirred up a new wave of discussion. First, on March 18, trading analytics platform the Tie reported that almost 90% of cryptocurrency exchanges’ reported trade volumes may be fake, and that as much as three-quarters of those platforms have suspicious volumes.

To conduct the research, the Tie took the reported trading volume for the last 30 days of the top 100 exchanges. They subsequently divided that data by the exchange’s website visits over 30 days estimated by SimilarWeb to determine the volume per visit.

As a result, Binance reported $750 traded per visit, Bittrex reported $138 traded per visit, Coinbase Pro $341, Bitfinex $862 and Poloniex $63.

Thus, to calculate the expected volume, the researchers used a weighted average of the trading volumes per website visit across Binance, Coinbase Pro, Poloniex, Gemini and Kraken — resulting in $591 — and multiplied this number by the web views. The Tie explained that it picked these exchanges “because of large usage among institutions, reputation within the market, and because their web viewership appeared consistent with their reported trading volumes.”

“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” the organization tweeted at the time, adding that it affects the larger picture:

Notably, on March 21, two exchanges featured in the research as having questionable figures — LBank and Bit-Z — dethroned Binance in terms of the adjusted trade volume on CMC. According to research presented by the Tie, LBank’s estimated reported volume per website visit amounts to $65,850.

However, the Tie admitted that its research had certain limitations: Specifically, the website views didn’t take into account API, mobile application trades and desktop client trades.

Because of that, the data could, in theory, just mean that either a much more significant than average portion of LBank users use the API, desktop or mobile clients, or that an LBank user trades over $65,000 per session on average. The Tie notes:

“There were limitations to this report including some of the aforementioned, but the point of the exercise was to show those exchanges that appear most suspicious and to start a greater conversation around wash trading, transaction mining, and liquidity.”

Bitwise: 95% of bitcoin trading volume on unregulated exchanges appears to be fake

On March 20, another substantial report on fake volume surfaced. Issued by cryptocurrency index fund provider Bitwise Asset Management, it argued that 95% of bitcoin trading volume on unregulated exchanges appears to be fake or noneconomic in nature.

Notably, Bitwise sourced its data from CMC, which it claims includes a large amount of this suspect data, “thereby giving a fundamentally mistaken impression” of the actual size of the bitcoin market.

Bitwise ultimately wrote that the real market for BTC is “significantly smaller, more orderly, and more regulated than commonly understood” — amounting in reality to $273 million instead of the $6 billion reported on CMC.

To prove its point, Bitwise first analyzed Coinbase Pro as an example of a regulated exchange to outline trustworthy trading patterns, including an “unequal and streaky” mix of red (sell orders) and green (buy orders) trades, whose distribution fluctuates considerably at any given time.

Further, Bitwise studied spread as a parameter, noting:

“It’s [the spread is] $0.01. At the time this screenshot was taken, bitcoin was trading at $3,419. That means bitcoin was trading at a 0.0003% spread, making it amongst the tightest quoted spread of any financial instrument in the world.”

Coinbase Pro reported around $27 million in daily traded volume of BTC at the time of Bitwise’s analysis — as compared with $480 million reported by Coinbene. The latter was used by the index fund provider to demonstrate the patterns typical of what it characterizes as “suspicious exchanges.”

Suspect signs included an unlikely perfect alternating pattern of green and red trades, as well as a lack of trades with round numbers or small values. On Coinbene, buy and sell orders also appear in timestamped pairs, with one compensating the other. Moreover, the spread on Coinbene at the time of Bitwise’s analysis was $34.74: “that compares to $0.01 on Coinbase Pro. It is surprising that an exchange claiming 18x more volume than Coinbase Pro would have a spread that is 3400x larger.”

Additionally, as per the Bitwise paper, suspect exchanges showed consistent volume throughout the day, while on regulated exchanges, volume corresponded to waking and sleeping hours.

CMC’s response: the DATA alliance

On March 25, Carylyne Chan, global head of marketing at CMC, told Bloomberg that concerns over fake volume “are valid,” which is why more information will be added to the website to help users make better decisions.

“For instance, if an exchange with low traffic has $300M volume and just 5 BTC in its wallet, users will be able to draw their own conclusions without the need for us to make arbitrary judgment calls on what is ’good’ or ’bad.’ We want to state that our philosophy is to provide as much information as possible to our users, so that they can form their own conclusions and interpretations — and not introduce our own bias into that mix.”

On May 1, CMC announced that it will require all crypto exchanges to provide mandatory API data, which includes their live trading data and live order book data, as part of a new transparency initiative titled “the Data Accountability & Transparency Alliance” (DATA).

The alliance was originally announced in CMC’s sixth anniversary blog post. The company explained that it has to deal with regular requests to delist crypto exchanges based on unverifiable information — such as screenshots of chat logs and emails — which is why CMC chose to empower its users to make more informed decisions and “provide a means for projects to differentiate themselves through enhanced disclosures” instead of applying harsh censorship:

“We are paying close attention to the growing discourse surrounding ‘fake volumes’ of exchanges. This is not a trivial problem to solve, as seemingly innocuous decisions can carry unintended consequences. To add to the complexity, we need to be mindful of the numerous use cases for our data – what some deem to be ‘fake data’ is information in and of itself that can yield interesting analyses, and it is important not to throw the baby out with the bathwater.”

Indeed, CMC seems to aim for a softer approach after removing a number of South Korean exchanges from its platform “due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity” back in January 2018, when it caused a major drop in the market.

Stressing that the new condition will be compulsory, the tracker stressed that any exchange that does not provide the data will be not be included in the price and adjusted volume calculations on the site. The changes will come into effect on June 14, 2019, CoinMarketCap noted.

Specifically, the required data includes exchange hot/cold wallet addresses (“indicative numbers to enable users to determine solvency of selected exchange”), live market-pair trading status (“more granular trading data at the market-pair level for further analysis”), live wallet status (“summary status of all possible deposits and withdrawals across currencies”), and historical trade data (“all time-stamped historical trades for tracking, and in some cases, compliance”).

“Our stance is that we do not censor any information, but rather will present all the information to users so that they can make their own judgments and decisions on the data presented,” Chan told Cointelegraph. “This philosophy of providing all the information rather than making our own judgment calls or censorship/curation is the same for data submitted by DATA members.” The global head of marketing at CMC added:

“As with all API endpoints submitted to us from exchanges (of which we now have 257 on CoinMarketCap) we work closely to ensure that the endpoints are up and running effectively. This constitutes the reported volume information that is presented on the site. The adjusted volume metric excludes those exchanges with fee rebates or transaction mining, and with the new mandatory data requirements, those that do not provide their live trade and orderbook data.”

When asked whether players have enough time to gather and submit the required information, Chan replied that the data “should not be technically hard for exchanges to provide,” and that the 45-day notice should ensure that there is enough time for everyone to join. According to her, no exchange has explicitly declined to join DATA so far:

“We carefully evaluated the requirements so as to make sure they are reasonable and not unnecessarily onerous for the majority of exchanges to provide. In fact, about 150 exchanges already submit this data, and we are simply waiting for the other exchanges to come up to speed on these data points.”

Exchanges’ comments

At this point, DATA is comprised of 12 exchanges: Binance, Bittrex, OKEx, Huobi, Liquid, UpBit, IDEX, OceanEX, Gate.io, KuCoin, HitBTC and Bitfinex.

Michael Gan, CEO of KuCoin, told Cointelegraph that CMC approached them about one month ago:

“After they introduced the whole idea, we soon decided to join DATA, as one of the early members. We are still communicating with CMC in terms of all the data submission and it will be done before the deadline.”

Starry Liu, head of marketing at OceanEX, told Cointelegraph that they were the only Initial Launch Partner of DATA that exists for less than one year. According to Liu, OceanEX approached CMC earlier this year to discuss “the idea of setting up an alliance to improve transparency across the whole industry,” and soon joined the initiative:  

“We found out this is also CMC’s goal. They actively asked about our feedback and acted really fast during the preparation of DATA.”

Liu specified to Cointelegraph that OceanEX integrated its data to the DATA project in less than one month. The information is collected, but not monitored by CMC, she confirmed:

“We prepare and stream raw data from OceanEx to them and CMC is taking a role more of collecting and disclosing data to the public, instead of monitoring. We may have different roles in this program, but we share the same vision and the ultimate goal, that is to benefit the community and the users.”

The KuCoin CEO, however, told Cointelegraph that CMC “mentioned that they will have a team to check all the data submitted, ensuring its accuracy as the DATA project expected.”

A representative of Exmo, the United Kingdom-based exchange that has applied to join DATA but has not been added to the official roster yet, told Cointelegraph that, while the new alliance is “a considerable step to the formation of the sustainable market,” the industry needs more solutions for the deep-rooted problems such as fake volume. Maria Stankevich, head of business development and communications at the exchange, wrote in an email:

“The fact that the data from the trading platforms will be collected in real time will expand the possibilities for studying the market and analyzing it and improve the understanding of the characteristics of various exchanges — that’s for sure. But this does not mean that the data provided by the websites will be completely objective.

“The same thing applies to the additional information about the exchanges, that is supposed to be submitted by the projects and exchanges by themselves. We don’t doubt the fact that it will be really useful for users — as it will be gathered in one place. But in general, we see it as an extension of the functionality of the CMC itself, an increase in its competitiveness in comparison with the other similar data aggregators.”

Cointelegraph has reached out to more exchanges currently listed in the top-50 by adjusted volume on CMC that are not part of DATA at this point — including Kraken and Coinbase Pro — but has yet to hear back from them.

Matthew Hougan, the author of the aforementioned Bitwise report, told Cointelegraph that he “admires CoinMarketCap for staring down the barrel of systemic fake volume in the crypto market.”

“We’ve seen a number of really robust responses to the problem of fake data, including from OpenMarketCap, Messari and Nomics, and I love that there is a diversity of smart people looking at this problem and driving towards solutions,” Hougan said. However, the researcher also suggested that the data gathered by CMC might still be unsubstantiated in the end:

“Ultimately, given the limited nature of regulations, the globally distributed nature of crypto trading, and the perverse incentives to exaggerate volume, the best approach is going to be ‘trust but verify.’ But CoinMarketCap has taken a good first step and is putting some teeth into its reporting requirements, and I’ll be interested to see what develops from their efforts.”

Meanwhile, CMC plants to extend its initiative even further in the future. “Collecting the data is just the first step,” the tracker wrote. “With a larger dataset, more analyses can be run, and enable the introduction of new, meaningful metrics.”

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Bitfinex’s Price for Bitcoin, $300 Higher than Market Rate, Excluded from CoinMarketCap

CoinMarketCap’s website explains that prices can be manually excluded from its bitcoin average if it “does not seem indicative of a free market price.”

Market data resource CoinMarketCap (CMC) has excluded Bitfinex’s price for bitcoin (BTC) from its global average, its website showed on May 6.

The embattled exchange’s BTC price was $5,986.60 at press time — almost $300 higher than the currency market rate of about $5,692. An asterisk has been placed next to its price on the CMC website to indicate its exclusion.

Explaining why some crypto prices and trading volumes are excluded, CMC’s website states:

“Some prices are manually excluded from the average, denoted by an asterisk (*) on the markets tab if the price does not seem indicative of a free market price.”

Bitfinex is fighting battles on several fronts at present. In late April, New York’s state attorney general alleged that the exchange lost $850 million and used funds from Tether, the stablecoin operator it is affiliated with, to cover the shortfall.

Both companies have denied the accusations — using a joint statement to claim the court filings were “riddled with false assertions.”

On May 3, NY’s attorney general requested the disclosure of documents concerning an alleged deal between Bitfinex and Tether, with Letitia James claiming that the firms “misled their clients and investors.”

A day later, an official document shared by a Bitfinex shareholder appeared to confirm that the exchange is planning an initial exchange offering IEO of up to $1 billion.