A cryptocurrency investor in Arizona has alleged that digital asset ranking site CoinMarketCap.com unfairly suppressed the ranking of a token that competes directly with the digital currency issued by CoinMarketCap’s corporate owner, Binance Capital Management.
Specifically, CoinMarketCap, Binance and several Binance executives are accused of suppressing the ranking — and consequently manipulating the price — of digital asset HEX. The investor’s complaint alleges that the defendants violated the Commodity Exchange Act, antitrust law and Arizona’s Consumer Fraud Act.
Discrepancies in digital asset ranking
According to the complaint, HEX was “the best-performing cryptocurrency of 2020,” and other sites that rank cryptocurrency have, as recently as June, listed HEX between fourth and 10th in size. However, the investor’s complaint alleges that CoinMarketCap.com has kept HEX mostly below the third page — locked at #201 — since 2020.
If not for this unfair ranking, says the complaint, buyers of higher-ranking digital currencies would have bought HEX instead. This has led to the suppressed price of HEX and the inflated price of other cryptocurrencies, including those issued by CoinMarketCap’s corporate owner.
“Despite CoinMarketCap.com’s promises of objectivity and fairness, CoinMarketCap.com has a history of manipulating its rankings to benefit Binance,” according to the complaint.
Additionally, the complaint says that the “buy” button on CoinMarketCap.com redirects users to a Binance site or to Blockchain.com. However, HEX is not available to trade on the Binance.US or Binance exchanges.
Legal issues of this sort are on the rise in the cryptocurrency space. If you have questions or concerns about cryptocurrency, securities law or related regulatory matters, we encourage you to consult with the cryptocurrency and securities law attorneys at Ford O’Brien Landy LLP. Our firm advises and represents clients in New York and nationwide.
Source: Law360, “Crypto Ranking Site Accused Of Manipulating Token Price,” Elise Hansen, Sept. 15, 2021