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CZ: “Binance bought CoinMarketCap, get over it.”
CZ: “Binance bought CoinMarketCap, get over it.”
Crypto

CZ: “Binance bought CoinMarketCap, get over it.”

By Eleonora Spagnolo - 19 May 2020

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Binance bought CoinMarketCap which means CoinMarketCap is the property of Binance, period. And it is independent, yes, but up to a point. This seems to be the essence of the thoughts expressed by the CEO of the exchange Changpeng Zhao in a long post on his blog. 

The long article was created in response to the controversy surrounding the acquisition of CoinMarketCap by Binance, which would have undermined the independence of one of the best-known portals for those operating in the cryptocurrency space.

CZ structures his thoughts by dividing them into categories:

  • Ownership,
  • Independence,
  • Influence,
  • Neutrality,
  • Cooperation.

His first statement is clear: 

“Yes, we bought CoinMarketCap. CoinMarketCap is part of the Binance ecosystem and family”.

CZ then goes on to analyze the concept of independence. In the Binance ecosystem, which comprises not only the exchange, but also BNB, Trust Wallet and WazirX to name but a few, each team is independent of the other. But there is a hierarchy and each team has goals to achieve. If there is no progress the team will answer for it. In short, decentralized but not too much, so CZ says:

“Even though we are more decentralized than most organizations on the planet, we are not a pure DAO yet. Although that is one of our long-term organizational structure goals”.

In any case, CZ considers that Binance has a high degree of independence.

Binance influences CoinMarketCap?

The real problem in the relationship between Binance and CoinMarketCap seems to be the influence of the buyer on the acquiree.

Again, CZ’s answer is clear and in a way also obvious: 

“Yes. I believe I do have some influence. I have regular meetings with all of our business units, including CMC, and provide my suggestions based on my experience running businesses. Others might ask, “Will CZ dictate how CMC is run?” No. I believe I give large degrees of freedom to all of our teams”.

The striking case in this regard concerns the update of the exchange ranking made by CoinMarketCap

A few weeks after the acquisition, Changpeng Zhao asked his Twitter followers what changes they wanted to see on CMC. The tweet wasn’t random. According to CZ in fact, it was the result of a meeting with the CoinMarketCap team, in which the issue was addressed. The meeting ended with the promise to launch a survey. Which arrived a few minutes later.

The survey showed that users would like to see:

  • The ranking of volumes of exchanges cleansed of fake volumes; 
  • Removal of scam projects.

And on these aspects, in particular on the first one, the CMC team took action, making improvements in the overall ranking. According to CZ, the team took too long. 

Anyway, the perfect exchange with a score of 1000 out of 1000 was… Binance! Coincidence? Yes, since in the new parameters of the ranking, Binance is the one with the best score. 

Is this a case of Binance’s influence on CoinMarketCap? Maybe. 

Is it legal for this to happen? Yes, it is. And it couldn’t be otherwise. CZ is clear:

“Should I not tweet about CMC to be seen as more distant or “independent”? Well, get over it. We bought it. You can safely assume I will continue to tweet heavily about CMC, just like I will continue to do so for Binance, BNB, Trust Wallet, WazirX, and all of the teams and projects in the Binance ecosystem”.

Is this why CoinMarketCap risks no longer being neutral? There’s a lot to be said about this. What CZ says is that CoinMarketCap has simply reported the data as it was collected. But he specifies:

“Our neutrality principles are simple. At no time will Binance.com (or any other exchange) be “manually” fixed into a position, ever. We will always strive to use a combination of metrics to achieve the most trusted data and rankings for users. And if Binance.com ranks first, it ranks first, if it doesn’t, it doesn’t. There is no manual tweaking of any ordering for any exchange”.

In short, CMC will remain neutral. If Binance is the best exchange, it will be based on merit and not on hierarchies. 

The CEO concludes:

“CoinMarketCap will continue to keep a neutral and collaborative stance with all projects and exchanges who are collaborative or neutral with us, just as Binance has always taken careful measures to be neutral to all projects who are neutral or collaborative with us. And we plan to continue to work with you all to grow the industry”.

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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