Crypto Platforms Misleading Users about Licenses: A Cointelegraph Investigation
Summary:
Investigations by Cointelegraph have revealed that several cryptocurrency platforms on CoinMarketCap were providing misleading information about their crypto licenses. The cryptocurrency exchange Bitspay, which claims $1.4 billion daily trades on CoinMarketCap, had alleged to have a license from Estonia. After Cointelegraph's inquiries, this claim was erased. Now, Bitspay and other exchanges are maintaining platforms on CoinMarketCap with minimal information about licenses and background operations.
Investigations by Cointelegraph have discovered several cryptocurrency platforms claiming significant daily trades on CoinMarketCap, were providing misleading information about their crypto licenses. The cryptocurrency exchange Bitspay, which claims $1.4 billion daily trades on CoinMarketCap, previously stated it had a licence and was regulated in Estonia. However, following inquiries from Cointelegraph, the company quickly removed these declarations.
Bitspay currently stands as the fourth-largest crypto exchange based on daily trading volumes on CoinMarketCap, outperformed only by platforms such as Binance, Bitforex, and Topcredit. CoinMarketCap reports Bitspay as a centralized exchange (CEX) based in Estonia, established in 2020 and regulated under Estonia's Anti-Money Laundering and Countering the Financing of Terrorism regulations.
On their site, Bitspay formerly stated it was licensed and regulated by Estonia’s Financial Intelligence Unit (FIU), however, following Cointelegraph's probe, the company removed this declaration. A subsequent inquiry by Cointelegraph prompted the FIU to confirm that Bitspay had no valid license in Estonia. According to them, the license number Bitspay previously advertised belongs to an Estonian company, Globe Assets OÜ.
Bitspay had made their license details visible until Sept.18, 2023. Following this, their website underwent rebranding from Bitspay.io to Bitspay.global on Sept. 21, where all data regarding registration or regulation in Estonia was removed.
For now, the exchange has not provided any information about its license or registration on its new website. Despite boasting of massive trading volumes, its presence on social media platforms like Twitter and Telegram remains minimal.
Kelly Nova, the supposed founder and CEO of Bitspay, informed Cointelegraph that the exchange is looking into obtaining licenses in Estonia and the UK, and that clusters of issues over copyrights led them to shut down the Bitspay.io domain. He provided no further clarification about the removal of their licensing claims or any information on Bitspay founders.
Other major exchanges such as Topcredit and Bika, both of whom demonstrate huge trading volumes on CoinMarketCap, have maintained silence about their operations and backgrounds.
CoinMarketCap admitted to the potential issues with self-reported data but pointed out that application programming interfaces (APIs) were the only practical choice for data gathering. It also emphasized on its scoring system and encouraged users to conduct personal assessments, particularly with exchanges scoring low.
CoinMarketCap, despite receiving criticism for inflated trading volumes in the past, maintains its integrity through its seasoned technology, stringent verification methodologies, and consistent reviews.
Bitspay was formally listed by CoinMarketCap in July 2023 while it remains absent on CoinMarketCap’s main competitor, CoinGecko, along with Topcredit and Bika. CoinGecko, nevertheless, lists a larger number of spot exchanges compared to CoinMarketCap. Investigations in 2019 by Bitwise Asset Management and data analytics firm The Tie pointed out the misleading nature of the reported trading volumes of numerous cryptocurrency exchanges.
Published At
9/26/2023 11:09:43 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.