CMC and CoinGecko's FTX Rankings Under Scrutiny

CoinMarketCap and CoinGecko's Controversial Rankings

CoinMarketCap and CoinGecko, prominent platforms for cryptocurrency ratings, have faced criticism for their high rankings of FTX. Both platforms had ranked FTX as the third-best cryptocurrency exchange shortly before its sudden collapse.

FTX's High Rankings Before Collapse

In early November, CoinGecko gave FTX a perfect trust score of 10, positioning it as a top exchange. CoinMarketCap also placed FTX just behind Binance and Coinbase. This ranking occurred days before FTX filed for bankruptcy after mismanaging client deposits and using illiquid tokens.

Reputation at Stake

The platforms' credibility is now questioned, with industry experts like David Tawil suggesting their reputations are at risk. Despite having millions of users, the analytical methods of these platforms are under scrutiny, especially regarding their criteria for assessing exchanges.

Evaluation Methods and Future Changes

The ranking systems focus on liquidity, security, and usage. However, FTX's failure has highlighted the need for more transparency and comprehensive evaluation methods. In response, CoinGecko has started tracking liquidity through a proof of reserves page, allowing users to verify asset exchanges using data sources like DeFiLlama and Nansen. CoinMarketCap plans to launch similar services to enhance transparency.

Conclusion

The situation underscores the importance of robust and transparent evaluation methods for cryptocurrency exchanges. As scrutiny continues, CoinMarketCap and CoinGecko must adapt to maintain their credibility in the crypto industry.