Cryptocurrency exchanges have been the well and true focus of the collective industry in 2019. With several reports spelling out how exchanges overwhelmingly fake volume data via wash trading and other antics, the industry is on high alert.
The premier report detailing the same was written by Bitwise Asset Management, which stated that around 95 percent of exchanges have fake volume. Now, a major cryptocurrency data aggregator in CryptoCompare has ranked exchanges based on a system of Due Diligence, Market Trade Quality, and Market Order Book Quality.
Taking a page out of the Bitwise report which listed only 10 exchanges which touted real volume, CryptoCompare did the same. However, with several exchanges repeating, while notable ones being absent. Bitfinex and Bittrex made way for Bithumb and Liquid in the latter’s report.
Seven key “components” with custom “weightings” were used as a metric, which included Geography [13.3 percent], Legal/Regulatory Assessment[13.3 percent], Investment[13.3 percent], Team/Company Quality [13.3 percent], Data Provision Quality[13.3 percent], Trade Surveillance[6.7 percent], and Market Quality[26.7 percent].
Each of the components has three or four sub-criteria which details the entire proceedings of the exchange, from VC funding, KYC/AML guidelines and the experience of the CEO, to liquidity and stability of the platform. Grades ranging from AA to F will also be awarded based on the points given to the score of the weighted components.
Coinbase, the poster child for the American cryptocurrency exchange industry, tops the list with one of six exchanges receiving an AA rating and a total score of 60.3. Other exchanges with a top grade are Poloneix, Bitstamp, bitFlyer, Liquid, and itBit.
Binance’s Poor Show
In the geography category, Bitstamp topped the list with a score of 9.16, while Liquid, the exchange that will host Telegram’s GRAM tokens received the lowest score of 6.12.