Bitspay, a crypto exchange claiming a $1.4 billion daily trading volume, faces allegations of displaying false Estonian licensing data.
In a recent investigation, Bitspay, a crypto exchange that claims to manage a staggering $1.4 billion in daily trades, faces allegations of falsely claiming to hold a license in Estonia. This troubling revelation impacts not only Bitspay’s credibility but also raises questions about the integrity of reported data within the larger cryptocurrency industry.
Bitspay ranks fourth in daily trading volume on CoinMarketCap, lagging only behind heavy hitters like Binance, BitForex, and Topcredit International. The exchange, established in 2020 and supposedly based in Estonia, boasted compliance with Estonian anti-money laundering and counter-terrorism financing regulations until recently. When investigators questioned the legitimacy of these claims, Bitspay hastily removed the purportedly false licensing information from its website.
Bitspay had stated it was regulated by Estonia’s Financial Intelligence Unit (FIU) under registration number FVR000796. However, when contacted, the FIU debunked these claims, revealing that the mentioned license number actually belonged to an Estonian company named Globe Assets OÜ. This license had also expired in January 2020.
Bitspay’s Sketchy Operations
Shortly after these revelations, Bitspay underwent a rebranding, changing its domain from Bitspay.io to Bitspay.global. The new website conspicuously lacks any details about the exchange’s registration or license status. Despite the absence of regulatory information, Bitspay continues to flaunt a daily trading volume equivalent to 65,249 Bitcoin or $1.7 billion. Contradictorily, Bitspay’s online social presence appears relatively minor, with about 400 followers on a social media platform formerly known as Twitter and roughly 16,000 members in its Telegram channel.
Kelly Nova, identified as the founder and CEO of Bitspay, indicated that the exchange is in the process of securing licenses in both Estonia and the United Kingdom. He attributed the recent domain name change to copyright issues. Nova remained elusive when asked for additional details about Bitspay’s founding team or why the exchange initially asserted to possess an Estonian license.
Bitspay isn’t the only crypto exchange reporting sky-high trading volumes with little known about its background or legitimacy. Exchanges like Topcredit and Bika also claim billions in daily trading volume but have been unwilling to provide any further details about their operations.
Scrutiny Over CoinMarketCap and Its Rivals
CoinMarketCap, a leading crypto data aggregator, acknowledges the challenges in verifying self-reported data but urges users to exercise due diligence. The platform, owned by Binance since April 2020, uses its scoring system to differentiate between exchanges. Bitspay, Topcredit, and Bika consistently score lower compared to well-known platforms like Binance.
CoinGecko, a primary competitor to CoinMarketCap, has not listed Bitspay, Topcredit, or Bika. CoinGecko seems to take a more cautious approach, listing a total of 784 exchanges compared to CoinMarketCap’s 225. CoinMarketCap itself has been a subject of criticism for alleged inflated trading volumes. Reports in 2019 by Bitwise Asset Management and data analytics firm The TIE have claimed that a significant percentage of reported trading volumes on unregulated exchanges seemed fabricated.