CoinMarketCap and CoinGecko's previous high ratings on FTX have been questioned
2022/11/18 07:00
Both crypto ranking platforms had FTX as the third-best exchange in the days before its collapse.
In light of what happened last week, both whiffed on FTX.
In early November, CoinGecko had FTX ranked as the third-best cryptocurrency exchange, with its trust score a perfect 10. On Nov. 8, CoinMarketCap ranked FTX as crypto’s third-best exchange, behind only Binance and Coinbase. On Nov. 11, FTX declared bankruptcy after it was found to have propped up related company Alameda Research with customer deposits and illiquid native tokens that blew a hole in its balance sheet.
The two analytics platforms rank exchanges based on an opaque algorithm that uses factors such as liquidity, security, and usage in their scoring. Asked how FTX was rated trustworthy despite being, well, not trustworthy, Zhong Yang Chan, CoinGecko’s head of research, said factors like whether an exchange’s assets are liquid were not talked about much before the past two weeks.
CoinMarketCap did not directly comment on how FTX achieved its ranking — a spokesperson told Blockworks the company’s exact methodology is kept private to prevent exchanges from gaming its rankings. On Nov. 2, the platform ranked FTX third in average liquidity, which CoinMarketCap measures based on price slippage during trades.
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