Binance Acquisition of CoinMarketCap for $400 Million Criticized, Hard Questions Asked

The Block, a cryptocurrency news site, reports that Binance, a leading exchange, will acquire CoinMarketCap (CMC) for a jaw-dropping $400 million.

$400 million.

This amount makes it one of the largest acquisitions of a coin tracking platform in history.

CMC is indispensable for Traders and Investors

But CMC isn’t just any other tracker.  It lists over 2,000 tokens and coins and attracts millions of unique visitors every month.

An industry, though emerging and hugely disruptive, must always have a reliable source of prices and new listings and which exchanges are ahead of the curve, the most liquid, which pairs are the most active, and which exchange’s influence is fading.

Ethereum and XRP supporters can always keep track of their coin’s performance and in real-time track whether they are closing in on Bitcoin, the most valuable digital asset. Traders can also place calculated bets depending on Bitcoin’s dominance and the likelihood of “flippening.”

CoinMarketCap availed all that and towers ahead of competitors, including Coingecko, for instance.

However, CMC has had its dark past. For example, they were accused of failing to delist exchanges known for wash trading. Also, they didn’t delist Bitconnect despite being a Ponzi.

Will Binance Take Full Control?

But with Binance in the equation, and considering their heavy investment, hard questions are beginning to be asked.

Binance is an independent exchange, it lists coins at their two ramps: Binance and Binance DEX for a fee. However, what the community is asking is whether Binance will have a hand, place quality controls, and determine which coins/tokens will be listed at the tracker.

The same applies to exchanges. Will Binance squash competitors by limiting certain data?

It’s a concern, and Twitter is abuzz with questions. One user asks:

“No disrespect to Binance, but this isn’t good at all for crypto. CMC is like the independent listing site for all crypto. When you have a crypto exchange/company take it over, who’s saying they will not have implicit biases when listing projects? Whatever though, money talks right. ”

Larry Cermak, another crypto supporter, is convinced Binance doesn’t have to pay $400 million unless the exchange is keen on tapping CMC’s traffic.

“This acquisition doesn’t make much sense to me. But a simple explanation is that Binance wants to get access to CoinMarketap’s 207.2 million traffic it got in the last 6 months.”

This acquisition doesn't make much sense to me. But a simple explanation is that Binance wants to get access to CoinMarketap's 207.2 million traffic it got in the last 6 months. pic.twitter.com/ZQV5B2wsIz

— Larry Cermak (@lawmaster) March 31, 2020