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Crypto Exchanges Still Taking Umbrage at Binance’s Coinmarketcap Ranking Play

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Following on from one of crypto’s bigger, and controversial, acquisitions, the fears of conflicts of interest with Binance buying out Coinmarketcap came to a head recently with their revamped exchange ranking system.

Bianance’s take over of the data site saw it enact its first new changes under the parent company which were aimed at stamping out fake volumes, but the rankings of exchanges saw a major overall that lead to the parent company coming out on top because of a new, questionable, chosen metric. 

Instead of ranking crypto exchanges by trading volume as is mostly agreed to be the best possible metric, the latest move from the Binance-owned Coinmarketcap was to put web traffic as the lead metric — this also put Binance on top.

Since this move there has been a lot of backlash from the community who feared for the impartiality of the site, but there has also been an outpouring of aggravation from Binance’s competitors. 

Competitor backlash

 Jay Hao, the CEO of major crypto exchange OKEx, explained his view to Cointelegraph and stated that a company owning any kind of rating agency that oversees its own field of business is unethical:

“Ethical issues tend to arise should there be a participant happened to be owning a ranking/rating company. It’s perceived to be inappropriate for a major shareholder of a credit rating agency to also be a shareholder in a bank who handles millions of bond insurance. Not to mention there are lack of sufficient firewall requirements defined by regulators as in crypto space.”

Ciara Sun, the head of global markets at Huobi Group, also voiced her concern to Cointelegraph that the Binance buy out was a conflict of interest:

“Ethics is only a concern when there’s a clear conflict of interest involved. In CMC’s case, Binance’s involvement has compromised its neutrality. I wouldn’t go as far as to suggest any malicious intent behind the acquisition but it does raise some ethical concerns given the benefits Binance stands to gain if they were to manipulate the ranking system.”

That being said, not all competitors found this purchase of the rankings site a problem. Paolo Ardoino, the chief technology officer at Bitfinex, outlined to Cointelegraph that the action, as far as he is aware, is not illegal and could provide an opportunity for Binance to improve the ownership structure and ranking metrics:

“Owning an exchange and a ranking platform raise potential conflict-of-interest concerns, but we are not aware of any illegality and, again, people are free to come up with a better ownership structure and set of metrics if they want.”

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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