Crypto exchange claiming $1.4B trading volume uses reportedly fake license data

A number of cryptocurrency platforms reporting billions of dollars in everyday trades on CoinMarketCap appear to have actually been deceiving their clients about holding particular crypto licenses, an examination by Cointelegraph has found.Bitspay, a crypto exchange that reports a $1.4 billion everyday trading volume on CoinMarketCap, declared it held a license in Estonia, and is managed under Estonian law. However, after Cointelegraph reached out with concerns about this license, the company quickly erased its supposedly phony license data.At the time of writing, Bitspay is the fourth-largest crypto exchange by daily trading volume on CoinMarketCap, following platforms like Binance, BitForex and Topcredit International.Top four crypto exchanges by everyday trading volume. Source: CoinMarketCapAccording to Bitspays page on CoinMarketCap, it is a central exchange (CEX) based in Estonia. The exchange was released in 2020 and claims to be managed under the Estonian “Anti Money Laundering Counter-Terrorism Financing Act 2019,” which appears to be describing the nations Money Laundering and Terrorist Financing Prevention Act.Bitspays information on CoinMarketCap. Source: CoinMarketCapBitspay also claimed it was licensed and controlled by Estonias Financial Intelligence Unit (FIU). “Bitspay Limited signed up with the registration number FVR000796, under the Laws of the Republic of Estonia,” the firm mentioned on among its domains, Bitspay.io, up until it eliminated the information immediately following Cointelegraphs inquiries.Bitspay claiming to have a license in Estonia on Bitspay.io. Source: Wayback MachineContacted by Cointelegraph, Estonias FIU reported that Bitspay didnt hold any valid license in Estonia. “We took an appearance into it, and it appears that the license number which they have formerly announced refers to an Estonian company, Globe Assets OÜ,” a spokesperson for the FIU said in a declaration on Sept. 21. The license was likewise valid for less than a year, from March 2019 up until January 2020, the representative noted.The FIU didnt respond to additional questions about Bitspays legal status in Estonia.Bitspay was revealing its website visitors information on the license pointed out above until a minimum of Sept. 18, 2023. The firm subsequently rebranded its website from the briefly unavailable Bitspay.io to Bitspay.global on Sept. 21, eliminating all data about being registered or controlled in Estonia.At the time of composing, Bitspay has actually not offered any info about its registration or license status on its new site. The exchange likewise declares on its website that its day-to-day trading volume amounts to 65,249 Bitcoin (BTC), or $1.7 billion. However, the exchange appears just to have around 400 followers on X (formerly Twitter) and some 16,000 members on its Telegram channel.Kelly Nova, who is said to be the founder and CEO of Bitspay, informed Cointelegraph that the exchange is working on licenses in both Estonia and the United Kingdom. “We have some copyright problems, whichs why we closed the Bitspay.io domain,” he stated. The exec didnt react to Cointelegraphs demand for further info about Bitspay founders or why the company formerly claimed to have a license in Estonia on its website.Bitspay seems far from the only platform reporting huge trading volumes on CoinMarketCap despite little being understood about its licenses, founders or background. Exchanges like Topcredit, which reports $1.8 billion in daily trading volume on CoinMarketCap, and Bika, which reports $1.2 billion, have been reluctant to talk to Cointelegraph about their background and creators.” We have actually long know that self-reported data can be problematic, but APIs are the only feasible source for data collection,” a representative for CoinMarketCap informed Cointelegraph.The representative likewise referred to the sites scoring system, explaining that platforms like Bitspay, Topcredit or Bika have a significantly lower rating than major exchanges like Binance, which has actually owned CoinMarketCap considering that April 2020. “We always motivate our users to perform their own due diligence, specifically with low-scoring exchanges,” the representative said, adding:” We know our data isnt foolproof. Our role is as a goal and thorough info aggregator, not a regulator. […] In other words, CMC numbers are as reputable as they can be, using our market leading experience, technology, verification approach and feedback loops […] “The spokesperson mentioned the crypto saying “do not trust, validate” and stated it embodies a fundamental concept of cryptocurrencies and blockchain technology.Related: Hong Kong to note suspicious crypto platforms in wake of JPEX scandalAccording to a public statement, Bitspay was noted on CoinMarketCap in July 2023. CoinMarketCaps main competitor, CoinGecko, hasnt listed this site, nor has it listed Topcredit or Bika. Regardless of this inconsistency, CoinGecko has significantly more spot exchanges listed than CoinMarketCap. At the time of writing, CoinGecko notes a total of 784 exchanges, while CoinMarketCap lists only 225. Websites like CoinMarketCap have actually regularly been slammed for supplying inflated exchange trading volumes. In 2019, Bitwise Asset Management declared that 95% of volumes on unregulated exchanges reported on CoinMarketCap were non-economic or fake wash trading in nature. Another examination by data analytics firm The TIE recommended in 2019 that more than 86% of reported crypto trading volume appeared suspicious.Collect this short article as an NFT to maintain this moment in history and show your assistance for independent journalism in the crypto space.Magazine: Big Questions: Whats with all the crypto deaths?.

A number of cryptocurrency platforms reporting billions of dollars in everyday trades on CoinMarketCap appear to have actually been deceiving their customers about holding certain crypto licenses, an examination by Cointelegraph has found.Bitspay, a crypto exchange that reports a $1.4 billion day-to-day trading volume on CoinMarketCap, declared it held a license in Estonia, and is regulated under Estonian law. After Cointelegraph reached out with questions about this license, the company quickly erased its supposedly fake license data.At the time of writing, Bitspay is the fourth-largest crypto exchange by day-to-day trading volume on CoinMarketCap, following platforms like Binance, BitForex and Topcredit International.Top four crypto exchanges by daily trading volume. Source: CoinMarketCapAccording to Bitspays page on CoinMarketCap, it is a centralized exchange (CEX) based in Estonia. Exchanges like Topcredit, which reports $1.8 billion in daily trading volume on CoinMarketCap, and Bika, which reports $1.2 billion, have actually been unwilling to talk to Cointelegraph about their background and founders.” We have long been conscious that self-reported data can be troublesome, but APIs are the only practical source for data collection,” a spokesperson for CoinMarketCap told Cointelegraph.The agent also referred to the websites scoring system, pointing out that platforms like Bitspay, Topcredit or Bika have a substantially lower score than significant exchanges like Binance, which has owned CoinMarketCap since April 2020.

Other Questions People Ask

What are the implications of a crypto exchange claiming $1.4B trading volume using reportedly fake license data?

The implications of a crypto exchange like Bitspay claiming a $1.4 billion trading volume while using reportedly fake license data are significant. It raises concerns about the integrity and transparency of the cryptocurrency market, potentially misleading investors and users. Such actions can lead to regulatory scrutiny and damage the reputation of legitimate exchanges, as trust is a crucial factor in the crypto space.

How did Bitspay's claims about its license status come under scrutiny?

Bitspay's claims about holding a license in Estonia were scrutinized after Cointelegraph reached out for verification. Following this inquiry, the exchange quickly removed the license information from its website, indicating potential deception. The Estonian Financial Intelligence Unit confirmed that Bitspay did not hold any valid license, further questioning the legitimacy of its operations.

What should users consider when evaluating crypto exchanges like Bitspay?

Users should conduct thorough due diligence when evaluating crypto exchanges like Bitspay, especially those claiming high trading volumes. It's essential to verify the legitimacy of their licenses and regulatory compliance, as seen with Bitspay's false claims. Additionally, users should be cautious of exchanges with low social media followings and limited transparency about their founders and operational history.

Why is self-reported trading volume a concern in the crypto industry?

Self-reported trading volume is a concern in the crypto industry because it can lead to inflated figures that misrepresent an exchange's actual activity. As highlighted in the case of Bitspay, many exchanges may report misleading data to attract users and investors. This practice undermines market integrity and can result in significant financial losses for unsuspecting traders.

What actions can regulators take against exchanges like Bitspay that use fake license data?

Regulators can take several actions against exchanges like Bitspay that use fake license data, including imposing fines, revoking operating licenses, and initiating criminal investigations. They can also issue public warnings to inform users about fraudulent platforms. Enhanced regulatory scrutiny may lead to stricter compliance requirements for all crypto exchanges, promoting a safer trading environment for investors.