Bitspay, an exchange in question, asserted a staggering $1.4 billion daily trading volume on CoinMarketCap and proudly presented an Estonian license. However, when subjected to inquiries regarding this license, the exchange promptly removed the purportedly false details. This development highlights worrisome issues regarding the reliability of trading volume information and the openness of specific cryptocurrency platforms.
Misleading Claims and Vanishing Bitspay’s Licenses
Bitspay, a cryptocurrency exchange that ranked as the fourth-largest by daily trading volume on CoinMarketCap, had been displaying information about its Estonian license until September 18, 2023. The company asserted it was licensed and regulated by Estonia’s Financial Intelligence Unit (FIU). However, a spokesperson for the FIU stated that the license was valid for less than a year, from March 2019 until January 2020, and that it referred to another Estonian company, Globe Assets OÜ, not Bitspay.
Bitspay’s website underwent a rebranding on September 21, 2023, changing from Bitspay.io to Bitspay.global. This rebranding removed all references to its registration or regulation in Estonia. As of now, Bitspay has not provided any information about its registration or license status on its new website.
Despite claiming a daily trading volume of 65,249 Bitcoin (BTC), equivalent to $1.7 billion, Bitspay has a relatively small online presence with around 400 followers on social media and 16,000 members on its Telegram channel.
Kelly Nova, who identifies as the founder and CEO of Bitspay, stated that the exchange is in the process of obtaining licenses in both Estonia and the United Kingdom. He mentioned copyright issues as the reason for the closure of the Bitspay.io domain but did not provide further details regarding the exchange’s founders or why the company initially claimed to hold an Estonian license.
Bitspay is not alone in reporting massive trading volumes on CoinMarketCap while maintaining secrecy about its licenses, founders, and background. Exchanges like Topcredit and Bika, reporting $1.8 billion and $1.2 billion in daily trading volume, respectively, have also refused to disclose information about their backgrounds and founders.
The Challenge of Data Accuracy
CoinMarketCap, a widely used cryptocurrency data aggregator, acknowledged the challenges associated with self-reported data from exchanges. They emphasized the importance of due diligence on the part of users, particularly when dealing with low-scoring exchanges like Bitspay, Topcredit, or Bika. CoinMarketCap, which has been owned by Binance since April 2020, maintains a scoring system that differentiates reputable exchanges from others.
A spokesperson for CoinMarketCap explained that their role is to aggregate information objectively and comprehensively, not to regulate the market. They noted that while their data isn’t infallible, they employ industry-leading experience, technology, verification methods, and feedback loops to maintain credibility. The spokesperson cited the famous crypto adage, “Don’t trust, verify,” as a foundational principle of cryptocurrencies and blockchain technology.
The revelations about Bitspay’s alleged fake license data and the wider issue of misleading information in the cryptocurrency market highlight the need for vigilance and thorough research when engaging with crypto exchanges. As the industry continues to evolve, users and investors must exercise caution and verify the claims made by exchanges to protect their interests and promote transparency in the cryptocurrency space. Cryptocurrency data aggregators like CoinMarketCap play a crucial role in providing information, but ultimately, it is up to individuals to “don’t trust, verify” in this fast-paced and ever-changing market.