Bithumb is critiqued for using promotional activities to inflate their transaction volume.
The biggest crypto exchange in South Korea, Bithumb is being critiqued by investors for using various promotional activities to pump their transaction volume.
According to Business Korea, Bithumb managed to achieve the number 1 position on Coinmarketcap top list of exchanges for “reported volume” on November 6th.
However, the crypto market watch platform decided to exclude Bithumb on the “adjusted volume” ranking, due to their trading promotion with fee rebates activities.
Quoting the statement from Coinmarketcap, “It [trading promotion with rebates] will encourage more trading activity than normal and might inflate the trading volume.”
To put as a remark, all other top exchanges, such as Binance, OKCoin, Huobi, and Upbit are ranked higher on adjusted volume than reported volume.
There are some parties that claimed that the exchange’s marketing campaigns inflates their transaction volume, which then leads to price differences with other exchanges and ultimately results in speculation.
Another claimed Bithumb of misusing their monopoly status to enforce ruthless competition in the crypto market.
Responding to all the critics, the exchange that’s just been bought by a Singapore consortium said, “We have never inflated the volume of transactions. It is not easy to estimate the actual transaction volume by calculating the effect of promotion events separately and it is difficult to accurately measure the volume of transactions based on data of one counting website.”
As recently reported by Chepicap, Bithumb just announced their 5th birthday celebration last month by conducting a Super Airdrop Festival. The festival that started from October 8th until “further notice” requires participants to trade at least one hour on the platform upon purchasing the coupon in advance.