It has come to light that a crypto exchange’s website inaccurately portrayed $1.7 billion in daily trades, despite the actual daily trading volume on CoinMarketCap amounting to $1.4 billion. There are reports indicating that the website provided misleading license data.
As highlighted by a Cointelegraph investigation, several cryptocurrency platforms seem to have misled their customers regarding certain crypto licenses, with many of them reporting billions of dollars in daily trades on CoinMarketCap.
Bitspay, a cryptocurrency exchange boasting $1.4 billion in daily trading volume according to CoinMarketCap, asserts that it is authorized to operate in Estonia, adhering to the country’s laws and regulations. However, when Cointelegraph reached out to Bitspay regarding the legitimacy of its license, the company promptly removed any reference to it from their website.
At the moment of writing this article, CoinMarketCap ranks Bitspay as the fourth-highest crypto exchange in terms of daily trading volume, trailing behind Binance, BitForex, and Topcredit International.
CoinMarketCap categorizes Bitspay as a centralized exchange (CEX) headquartered in Estonia. The exchange was founded in 2020 and reportedly adheres to the Estonian Anti-Money Laundering Counter-Terrorism Financing Act of 2019, which references the country’s Money Laundering and Terrorist Financing Prevention Act.
Bitspay previously stated on its website, Bitspay.io, that it was licensed and regulated by the Estonian Financial Intelligence Unit (FIU), providing a registration number “FVR000796” for its company. However, it removed this information from its website shortly after Cointelegraph’s inquiry.
When contacted by Cointelegraph, the Estonian FIU contradicted Bitspay’s previous claim of having a license. The FIU representative stated on Sept 21 that the license number associated with Bitspay belongs to a different company, Globe Assets OÜ. The FIU representative further clarified that the license number was only valid for less than a year, from March 2019 until January 2020. The FIU didn’t provide any additional information about Bitspay’s legal status in Estonia.
Until September 18, 2023, Bitspay displayed information about a license number that belonged to another company. However, on September 21, 2023, Bitspay rebranded its website from the briefly unavailable Bitspay.io to Bitspay.global on Sept 21, deleting any mention of its previous registration or regulation in Estonia.
At the time of writing, Bitspay is still not providing any information about its registration or license status on its website.
Even though Bitspay claims to have a daily trading volume of over 65,000 Bitcoin or $1.7 billion, its social media presence seems relatively small with 400 followers on X (formerly Twitter) and 16,000 members on its Telegram channel.
According to its founder, Kelly Nova, Bitspay is working on obtaining licenses in both Estonia and the United Kingdom. “We have some copyright issues, and that’s why we closed the Bitspay.io domain,’ he said.”
Kelly Nova, the alleged founder and CEO of Bitspay, did not respond to Cointelegraph’s request for information about the exchange’s founders or its prior claims of licensing in Estonia.
Bitspay is not the only platform on CoinMarketCap displaying substantial trading volumes, even though there is limited information available about its licenses, founders, or background. Platforms such as Topcredit, which boasts a daily trading volume of $1.8 billion on CoinMarketCap, and Bika, which claims $1.2 billion, have declined requests from Cointelegraph for insights into their origins and founders.
“We have long been aware that self-reported data can be problematic, but APIs are the only viable source for data collection,” a spokesperson for CoinMarketCap told Cointelegraph.
Additionally, the spokesperson highlighted the website’s rating system, emphasizing that platforms such as Bitspay, Topcredit, or Bika possess notably lower ratings compared to prominent exchanges like Binance, which has held ownership of CoinMarketCap since April 2020.
The spokesperson’s reference to the phrase “don’t trust, verify” reflects a core tenet of cryptocurrencies and blockchain technology.
As per an official statement, Bitspay made its debut on CoinMarketCap’s listings in July of 2023. Notably, CoinGecko, CoinMarketCap’s primary competitor, has refrained from listing Bitspay, as well as Topcredit and Bika. Despite this disparity, CoinGecko currently boasts a significantly larger number of spot exchanges in its directory, tallying 784 exchanges, while CoinMarketCap lists only 225 as of the time of writing.
However, websites such as CoinMarketCap have faced persistent backlash for presenting exaggerated trading volumes on exchanges. In 2019, Bitwise Asset Management asserted that 95% of the volumes showcased on CoinMarketCap for unregulated exchanges were either fake or constituted non-economic wash trading.
In 2019, data analytics company The TIE conducted a separate inquiry, indicating that over 86% of the disclosed cryptocurrency trading volume raised concerns of being suspicious.