In a deal reported to be worth around $400 million, Binance has officially acquired CoinMarketCap.com, the industry’s go-to aggregator of cryptocurrency data. The world’s largest crypto exchange, however, didn’t disclose the exact financial terms of the deal or the actual entity that made the takeover.
Announced today, Binance tried to downplay concerns over the obvious conflict of interest stemming from buying the primary website used by the majority of cryptocurrency traders.
Per the release, CoinMarketCap will maintain its independence in technical development and operations as well. The US-based data provider’s founder and CEO Brandon Chez, however, will be stepping down and will be replaced by strategy officer Carylyne Chan. The interim CEO has joined CoinMarketCap in June 2018 and was originally appointed as head of marketing.
“CoinMarketCap and Binance are separate entities that maintain a strict policy of independence from one another: Binance has no bearing on CoinMarketCap rankings, while CoinMarketCap has no influence over Binance’s operations,” the two crypto giants said in a joint statement.
Binance has made a number of acquisitions in the blockchain and crypto space in recent months, including buying the spot and derivatives trading exchange JEX and the well-known Indian crypto platform WazirX.
Chasing Fake Volumes
According to estimates from Forbes, over 125 million people are relying on CoinMarketCap data, which allows the 40-person firm to generate $20 to $30 million per year in advertising revenue.
Not too long ago, CoinMarketCap was hit by allegations of volume manipulation and wash trading. Many highly-cited reports claim that up to 95 percent of all reported cryptocurrency trading volume is manipulated or completely false.
Although volume is arguably the most important metric for a cryptocurrency exchange, most enthusiasts are well aware that the prices on CoinMarketCap.com look skewed, and volumes are ‘relatively’ fabricated.
On its part, CoinMarketCap made some changes to their algorithm, including debuting a new column for “adjusted volume” on its ranking page. The site has also acknowledged the concerns aired by the crypto community about inflated turnover figures. And in an attempt to obtain a true picture of global cryptocurrency volume, it introduced new features that account for the many variables that affect trading volume and allowed users to filter trading venues according to them.
(Photo: Binance)
