Bithumb, the biggest cryptocurrency exchange in South Korea, has been excluded from a global cryptocurrency exchange ranking on the grounds that it is highballing its transaction volume.
Bithumb is suspected of generating a considerable amount of transactions through promotion events in which it returns transaction fees to its users. Criotics say it is hard to compare Bithumb's volume of transactions with other exchanges on the same line. Accordingly, some point out that Bithumb can create market confusion by raising variability of cryptocurrency prices as it incites investors to speculate.
According to industry sources on Nov. 6, global cryptocurrency data provider CoinMarketCap has excluded Bithumb from the “adjusted volume ranking” starting from last month. An adjusted volume is the figure that excludes the volume of transactions at no commission fees from the total transaction volume of a cryptocurrency exchange.
CoinMarketCap is a reputable cryptocurrency data provider, which is cited by the press at home and abroad and the industry the most, along with Coinhills. CoinMarketCap said, “Due to Bithumb’s trading promotion with fee rebates, it will encourage more trading activity than normal and might inflate the trading volume.” According to the global cryptocurrency data provider on the same day, Bithumb ranked first among cryptocurrency exchanges around the world in terms of "reported volume" but it was excluded from the adjusted volume ranking. On the other hand, large foreign exchanges, such as Binance, OKCoin and Huobi, and Upbit ranked higher in terms of adjusted volume than reported volume.
In fact, Bithumb recently carried out a promotion event of fee rebates when listing new virtual currencies several times. In particular, it also held a promotion event of a 120 percent fee payback to celebrate the fifth anniversary of its founding in August this year. Based on this, Bithumb beat Upbit and Coinone to take first place among domestic exchanges.
Investors criticize that Bithumb raises price variability compared to other exchanges by inflating the volume of transactions with the marketing campaign of fee rebates, inciting speculation. Some say that Bithumb is driving the market to “cutthroat competition” by using its monopoly status. In this regard, Bithumb said, “We have never inflated the volume of transactions. It is not easy to estimate the actual transaction volume by calculating the effect of promotion events separately and it is difficult to accurately measure the volume of transactions based on data of one counting website.