Crypto firm allegedly fakes license data while claiming $1.4B in trades on CMC.

Crypto firm allegedly fakes license data while claiming $1.4B in trades on CMC.

The Deceptive Practices of Cryptocurrency Exchanges: Examining Bitspay

In the fast-paced world of cryptocurrency, many exchanges vie for customers’ attention by boasting about their trading volumes. However, it has come to light that some platforms may have been misleading their customers, particularly when it comes to claiming licenses and regulatory compliance. Cointelegraph’s investigation has revealed that Bitspay, one such exchange, appears to have provided false information about its license status in Estonia. These deceptive practices raise concerns about the credibility and transparency of the blockchain industry.

The Rise of Bitspay: A Deceptive Crypto Exchange

Bitspay, currently the fourth-largest crypto exchange by daily trading volume on CoinMarketCap, claimed to hold a license in Estonia and to operate under Estonian law. The exchange reported a staggering $1.4 billion in daily trading volume. However, when Cointelegraph questioned Bitspay about its license, the company swiftly removed the allegedly false license data from its website. This discovery calls into question the veracity of Bitspay’s claims and raises suspicions about other exchanges reporting massive trading volumes.

Bitspay’s page on CoinMarketCap describes it as a centralized exchange (CEX) based in Estonia. The exchange launched in 2020 and purportedly operated under the Estonian “Anti Money Laundering Counter-Terrorism Financing Act 2019.” Upon closer examination, this regulation appears to refer to the country’s Money Laundering and Terrorist Financing Prevention Act.

Bitspay further asserted that it held a license from Estonia’s Financial Intelligence Unit (FIU) and provided registration details. However, when contacted by Cointelegraph, the FIU stated that Bitspay did not possess a valid license in Estonia. The license number previously announced by Bitspay belonged to a different Estonian company, Globe Assets OÜ. Additionally, the FIU revealed that the license was only valid for a limited period, from March 2019 to January 2020.

Bitspay’s Attempted Cover-Up

Bitspay continued to display the aforementioned license information on its website until September 18, 2023. However, on September 21, the exchange rebranded its website from to, promptly erasing any mention of registration or regulation in Estonia. As of now, Bitspay has not provided any information regarding its registration or license status on its new website. These actions cast doubt on Bitspay’s credibility and integrity as a cryptocurrency exchange.

The Questionable Practices of Other Exchanges

Bitspay is not the only platform that reports massive trading volumes without providing substantial information about licenses, founders, or backgrounds. Exchanges like Topcredit, with a daily trading volume of $1.8 billion, and Bika, with a reported volume of $1.2 billion, have also been unwilling to disclose information to Cointelegraph. This lack of transparency further highlights the need for due diligence and caution when dealing with crypto exchanges.

Industry Challenges and the Role of CoinMarketCap

The case of Bitspay underscores the challenges faced by platforms like CoinMarketCap, which depend on self-reported data from exchanges. While the website acknowledges that self-reported data can be problematic, it currently relies on APIs as the most viable source for data collection. CoinMarketCap’s spokesperson stressed that the platform encourages users to conduct their own due diligence, especially with lower-scoring exchanges.

Acknowledging the need for credibility, CoinMarketCap emphasizes the importance of verification and feedback loops in maintaining accurate data. Although the exchange scoring system differentiates major exchanges like Binance, owned by CoinMarketCap, from others like Bitspay, further measures may be necessary to tackle misleading information in the industry.

Blockchain’s Fundamental Principle: Trust Through Verification

The deceptive practices of exchanges raise concerns about the integrity of the blockchain industry. As the spokesperson for CoinMarketCap suggested, the industry saying “don’t trust, verify” embodies the foundational principle of cryptocurrencies and blockchain technology. This principle emphasizes the importance of transparency and credibility within the industry and promotes the cautious evaluation of exchanges and platforms.

Conclusion: Transparency and Trust in the Blockchain Industry

The case of Bitspay highlights the need for improved transparency and regulation in the blockchain industry. Crypto exchanges must be held accountable for providing accurate and verifiable information to their users. To protect themselves, investors must exercise due diligence and critically evaluate the claims made by exchanges. As the industry evolves, it is crucial for stakeholders to collaborate and establish standards that promote trust, credibility, and transparency in the blockchain space. Only through these measures can the full potential of blockchain technology be realized.

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