- Chinese reporter Wu questions CMC and CoinGecko ranking FTX highly on their platforms.
- ProChain Capital CEO David Tawil predicts the analytic platform’s image is tarnished.
- CoinGecko has begun tracking liquidity through its proof of reserves page.
Colin Wu, a Chinese reporter, recently tweeted about how CoinMarketCap and CoinGecko ranked FTX highly on their respective crypto rating platforms. According to Wu, FTX was ranked among the third-best exchanges on both the platforms in the days leading up to its colossal collapse.
CoinMarketCap and CoinGecko are two main crypto analyzing and rating services that assess cryptocurrency exchanges based on their reliability and trustworthiness. Given what transpired last week, both credible websites blew it on FTX, and are now under the radar.
In detail, Wu, as he back-dated CoinMarketCap and CoinGecko’s FTX rating, noticed that in early November, CoinGecko recognized FTX as the third-best cryptocurrency exchange, with a flawless trust score of 10. On November 8, CoinMarketCap ranked FTX as the third-best cryptocurrency exchange, just under Binance and Coinbase.
On November 11, FTX filed bankruptcy when it discovered that it had used client deposits and illiquid native tokens to prop up linked business Alameda Research, blowing a hole in its financial sheet.
Until now, CoinMarketCap and CoinGecko have gained over 100 million and 33 million footfall, respectively. On the contrary, David D. Tawil, crypto hedge fund CEO of ProChain Capital predicted that this reputation may not persist for long.
As reported by Wu, Tawil made bold claims saying that:
I think [CoinGecko and CoinMarketCap’s] reputation is thrown out the window.
The two analytics platforms rank exchanges based on an approach that takes into account criteria like liquidity, security, and usage. When asked about FTX’s trustworthy rating during the investigation, CoinGecko’s chief of research Zhong Yang Chan shared that factors like the liquidity of an exchange’s assets weren’t discussed before.
Chan also stated that amid FTX’s advancements, there has lately been a significant desire for centralized exchanges to adopt greater openness surrounding their reserves.
As of last week, CoinGecko began tracking liquidity through its proof of reserves page. Users can now check the number of assets exchanged mostly based on data from DeFiLlama and Nansen. Moreover, CoinMarketCap has also assured to offer proof of reserves services soon.
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