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Changpeng Zhao defends CoinMarketCap and causes new controversy on Twitter

May 19, 2020

In one Tweet recently the CEO of Binance (BNB) (commonly abbreviated CZ), he apparently accidentally admitted his involvement in the management of the CoinMarketCap (CMC) ranking.

Follow Elon Musk’s footsteps?

In Zhao’s tweet from May 14th Apparently he is admitting his involvement in CMC management.

Source: Twitter

Changpeng Zhao defends CoinMarketCap and causes new controversy on Twitter
Changpeng Zhao defends CoinMarketCap and causes new controversy on Twitter

Source: Twitter

If you should not be involved in the CMC decisions or the adjustment of various measures, the question arises:Why does the Binance CEO make public statements suggesting otherwise? At the very least, it puts some public pressure on CMC administration.

The situation reminds us of Elon Musk’s Twitter charade, Their tweets got the businessman in trouble with the SEC. Binance’s secret legal position could protect it from regulations. However, It doesn’t make you immune to reputational damage.

Conflict of interest

Binance’s involvement in CMC raised suspicions from the start. Many believe that there is a conflict of interest. But Binance assured the community that the two of them Commercial companies remain independent of one another:

“No Binance employee, including CZ, has control over CoinMarketCap’s ranking algorithms or listing processes. Crypto assets that want to be included in CoinMarketCap must comply with the guidelines in our listing policy and are fairly and independently valued based on their merits. “

The Binance competition is responding

Many have wondered if this independence is real Due to the recent restructuring of the stock exchange ranking, which brought Binance to first place. As a result, OkEx Chief Strategy Officer Alysa Xu said the CMC ranking was “dead.”

Clay Collins, CEO of Nomics, the CMC antagonist, said Cointelegraph as Binance also leads the Nomics stock exchange ranking. However, he still believes the latest changes to the CMC list could backfire in the long run:

“Binance could be examined much more closely if it is found that CoinMarketCap is misrepresenting financial data so that (1) Binance is directly supported and harmed traders, or (2) CoinMarketCap’s position is used to help Binance at the Obtaining an unfair competitive advantage over other exchanges, especially if traders were also affected. Even if the misrepresentation was the result of a mistake. “

Ciara Sun, director of global markets for the Huobi Group, He told Cointelegraph that the CZ tweet seems to imply his involvement:

“The CZ tweet that they will ‘iterate’ further within the CMC ranking, which certainly implies their participation, but I will let the community interpret it.”

Sun believes Binance has acquired CMC “endangers their neutrality”and point out An exchange was hacked for $ 7,000 bitcoins (BTC). You should never get a perfect score:

“In addition to the metric restrictions such as web traffic and the CMC ranking system, other decisive factors such as the security, compliance and licensing of a stock exchange as well as the total assets under management (AUM) are not taken into account). Any exchange hacked from 7,000 BTC should never get a perfect score. Compliance is perhaps one of the most important indicators for a reliable exchange. And AUMs say much more about an exchange than about web traffic. (Huobi currently manages more than 5% of CoinMarketCap’s total market value.) I would even suggest community voting as a metric rather than a clear framework for assessing actual trade volume. “”

Lennix Lai, director of financial markets at OKEx, He also told Cointelegraph that he believes the new ranking is “fixed”:

“It is known that web traffic is one of the most influential parameters for classifying an exchange, considering that the metric is easily distorted by mobile traffic and controlled by VPN, which is why most data analysis sites have a more scientific and robust approach chosen by ranking for volume, liquidity and depth of market. I’m skeptical that CMC, which has promoted its data and transparency through its DATA initiatives, is still withdrawing at this point with a fixed parameter. “

CZ replies

In a statement to Cointelegrpah, CZ again confirmed that no exchange is manual first: Although the crypto industry often operates outside of typical trading standards, its reputation remains important.

“Binance.com (or any other exchange) is never ‘manually’ tied to a position. We will always endeavor to use a combination of metrics to get the most reliable data and ratings for users. And if Binance. com it comes first, it does. Otherwise no. There are no manual adjustments to an order for an exchange. “