CryptoExchangeRanks (CER) investigates BitForex for doing mark up on trading volume figures.
The hype of the crypto space has led to many cryptocurrency exchanges being built and introduced to the public. With the many competitions on the space, some exchanges, especially the new ones are allegedly reporting marked up trading numbers in order to gain legitimacy and increase their user base quickly.
CryptoExchangeRanks (CER), a website that provides real-time data analysis of crypto exchanges, suspected a dishonest volume mark up practice with BitForex. The relatively new exchange reported a huge figure on their trading volume last month that put them on the top 10 cryptocurrency exchange by volume on Coinmarketcap.
Ranked at number 7, BitForex exceeded another longer established exchange, such as Kraken with $200 million over $27million. While novelty can't be used as a benchmark for slow improvement, as proven by Binance which managed to become top crypto exchange within a short period, CER found these numbers are intriguing.
They decided to run an analysis of the BitForex's web traffic and compare them with other established exchanges, such as Kraken and KuCoin. The analysis showed that BitForex had approximately 60,000 users, whereas KuCoin had 889,000 and Kraken 666,000. With the reported trading volume of $200 million, each of BitForex's users would have to trade tens of thousands of dollars daily to achieve the number.
CER also analyzed the engagement on BitForex's social platforms and compare it with other exchanges. It somehow showed a lower level of engagement, compared to other exchanges that reported lower trading volumes. In the case of Binance with their impressive growth within a short period, the exchange showed significant social media engagement on all platforms, which can justify their growth.
After analyzing the findings, CER concluded BitForex has reported bogus figures to the public, which CryptoGlobe mentioned as "a desire for the new exchange to quickly gain legitimacy and expand its user base."
As reported by Chepicap just last week, CER also accused another exchange to have manipulated trading data in order to gain a higher rank. BigONE managed to be the 3rd most popular by daily volume, in a matter of days.
These findings are a confirmation for crypto enthusiasts to be very considerate when taking any data from the internet to support their investment decisions.