David – Cryptocurrency Expert
Reporter Wu from China queries why FTX is ranked so highly on CMC and CoinGecko's platforms
The CEO of ProChain Capital, David Tawil, forecasts that the analytical platform's reputation will suffer
Through its proof of reserves website, CoinGecko has started monitoring liquidity
Chinese journalist Colin Wu recently tweeted about how FTX was highly rated on CoinMarketCap and CoinGecko's respective crypto rating services. According to Wu, in the days preceding its catastrophic collapse, FTX was rated as one of the third-best cryptocurrency exchange platforms on both websites.
Two major cryptocurrency analysis and evaluation websites, CoinMarketCap and CoinGecko, rate crypto exchange platforms according to their dependability and trustworthiness. Given what happened recently, both reputable websites blew it on FTX and are now apologizing. Wu noted that in early November, CoinGecko ranked FTX as the third-best cryptocurrency trading platform, with a perfect trust score of 10, after backdating the rankings from CoinMarketCap and CoinGecko.
When FTX realized that it had propped up a related company called Alameda Research with customer deposits and illiquid native tokens, creating a hole in its financial statement, it filed for bankruptcy on November 11.
The number of visitors to CoinMarketCap and CoinGecko up to this point has been above 100 million and 33 million, respectively. On the other hand, David D. Tawil, CEO of ProChain Capital's cryptocurrency hedge fund, indicated that this reputation would not last for very long.
The two analytics platforms rate exchanges using a methodology that takes factors like liquidity, security, and usage into consideration. CoinGecko's chief of research Zhong Yang Chan said that elements like the liquidity of an exchange's assets weren't previously highlighted when questioned about FTX's reliability during the examination.
Chan said that, in light of FTX's developments, there has recently been a strong push for centralized exchanges to embrace greater openness on their reserves.
CoinGecko started monitoring liquidity last week through its proof of reserves website. Now, users may look into the amount of assets traded primarily using data from DeFiLlama and Nansen.
If you want to sell crypto on a reputable platform, which does not have any of its own native tokens with sensible liquidity pools, check out cryptobroker BC Bitcoin. Its main service is to let their customers buy and sell cryptocurrency, without needing to keep their crypto assets on the platform. Everything goes from one wallet to another wallet.