TokenInsight Exchange Rating Report (June 2018 — August 2018)
The overall condition of the cryptocurrency market has been sluggish in recent months as exchange trade volume has significantly shown steady decline.
Among them, the most significant change was the general decline in 24-hour trading volume seen from exchanges as compared to earlier this June. For example, between May 31st and August 30th, 24-hour exchange trading volume seen from TokenInsight’s database of the top 20 exchanges released back in June this year fell by an average of 31.9%.
Even with the excitement brought by a new model of mining seen earlier this June called “Trans-Fee Mining” by a disruptor exchange named FCoin, market trade volume has not shown a rise in popularity. In fact, trade volumes for this new model have even been criticized by many as illegitimate and possibly fabricated to inflate market cap.
At the same time, governments around the world have become more rigorous in regulating the cryptocurrency market, and major exchanges have begun to pay more attention to their own compliance. For example, Japanese financial regulators surveyed more than 20 Chinese exchanges in August 2018 and are preparing to launch a new review process.
In response to new changes in the market environment and the development of major exchanges, TokenInsight and Ukraine’s decentralized security company Hacken upgraded information and data for major exchanges. Hacken is CoinMarketCap’s partner in trading volume data and security review.
During this recent rating report, TokenInsight indicated that a total of 5 exchanges were downgraded, one exchange was upgraded, and three exchanges were added to their list. Among them, Coinbase Pro was the only exchange upgraded by virtue of its good performance in policy compliance and community activity.
TokenInsight has selected 10 exchanges to provide detailed explanation in various categories and presents the results of the rating exchange through statistical data and information. In this rating report, we not only evaluate the overall 24-hour trade volume of exchange platforms, but also evaluate transactions, volume, security and many other parameters that are reflected from many angles.
Binance — [A]
“Binance is a digital asset trading platform founded in July 2017. At present, Binance has launched over 140 types of tokens and has established the cooperation with several security service institutions to conduct the projects code audit. It discloses the information of operation by several means, including annual report, monthly reports and weekly reports. Its average daily trading volume is about 1 billion USD and the average daily UV is around 510,000. Among all Binance listed tokens, 70% rank among top 200 and is of good quality.
Recently, a Demo of a decentralized exchange, which could issue, list and trade tokens, has been published by Binance. And the formal version of it is expected to be released by the end of 2018. Besides, Binance made progress in expanding its business recently. In June, Binance Uganda was established. In July, Binance has cooperated with Malta Stock Exchange and thus security tokens can be offered and traded in Binance. In addition, an exchange that support trading in Swiss Franc and Euros has been launched in August.”
Coinbase Pro — [BBB → A]
Coinbase Pro is Coinbase’s digital trading platform founded in 2012 and specifically designed for individual investors. Only five mainstream tokens have been listed and strict identification verification is required in the platform. Coinbase Pro serves 33 countries and regions so far, mainly in Europe and America. The core members are mainly from traditional financial institutions and Internet giants with strong financial and technical backgrounds.
Coinbase focuses on compliance and strictly follows the KYC, AML, and regulations on money transmission. It has licences in 38 US states and is one of the few companies to hold a BitLicense, a business license for digital currencies activities issued by the New York State Department of Financial Services. In addition, Coinbase recently acquired securities firms with SEC compliance licenses.
Recently, Coinbase announced that Cardano(ADA), Basic Attention Token(BAT), Stellar(XLM), Zcash(ZEC), and 0x(ZRX) would be considered to be listed on the platform. Ethereum Classic(ETC) got a heated market once listed on the platform.
Brian Armstrong, the CEO, announced that the number of users had increased by 50,000 every day on average. Coinbase Pro is the first exchange that has more than one million followers on Twitter.
BitFlyer — [A → BBB]
BitFlyer is a digital token exchange established in January 2014 and is certified in FSA, several states in the US and Lëtzebuergand. At present, Japanese Yen is accepted for trading on BitFlyer directly. The platform has only listed 7 tokens so far. The platform users are concentrated i.e. 98% of its users are located in Japan. Thus, the exchange is heavily exposed to Japanese regulations.
At the end of June, BitFlyer was instructed by the authority to improve its account verification system for AML. The platform’s new user registration has been halted since 22 June 2018, which has a huge negative impact on trading volume and user amount.
Bit-Z — [BBB]
Bit-Z is a digital token exchange established in 2016 and headquartered in Hong Kong. At present, there are more than 130 kinds of tokens listed on Bit-Z and 17 among them was listed in July. 67% of new tokens listed on Bit-Z fell below their listing price in first trading day and 73% in 30 days. The platform operation is transparent, and it has weekly and monthly reports disclosing the current operating condition published regularly.
In June 2018, Bit-Z has disclosed its team information, indicating that Chang Shun would serve as CEO and Song Ying, Huobi’s first CTO would serve as the technical advisor. Bit-Z plans to build its branches in Japan, Korea, and Singapore. So far, the project in Japan and Korea has been launched but still need to solve some regulatory issues.
Upbit BBB → BB (downgrade)
Upbit is one of the major cryptocurrency trading platforms in Korea and is backed by Korean fintech firm Dunam and American Exchange Bittrex. The platform was established in October 2017. The majority of the platform’s customers are from Korea and the platform is regulated by the Korean government.
The platform only supports transactions between digital assets, with 163 tokens listed, most of which rank lower than 200. Since its establishment, there have been no severe security incidents. It has been investigated for market manipulation by the Gangnam branch of Seoul but no charge has been made. Yet, the regulatory risk is relatively high due to the tightened regulations. Besides, its daily trading volume has sharply decreased after the recent investigation.
FCoin BBB → BB (downgrade)
FCoin is a token exchange established in May 2018 and headquartered in Hong Kong. At present, FCoin has launched 174 types of tokens. ‘Trading is Mining’ has brought large volume for the platform and users is free from paying the transactions or can receive dividends from trading. The platform has multiple trading patterns and builts partnerships with the Jiangwei Security and CertiK.
Yet, the trading pattern without hard cap has incentivized FT holders to sell FT for profit, resulting in a sharp decline of FT price.
In July 2018, the C-Board has been initiated in FCoin. QOS is its initial token but its price dropped sharply after being listed on C-Board, which brings the illegal financing issue about QOS project.
ZB.com — [BB → B]
ZB.com was founded in 2017 and is a global digital token exchange, which has obtained exchange licenses from Thailand and Dubai. The community based digital token exchange ZBG and financial derivative trading platform BW have been launched. It has listed about 70 types of tokens so far and the daily transaction volume is around 200 million USD.
In August 2018, ZB.com has established a cooperation with Maltese prime minister officer, and the digital trading would start in Malta in September. But the disclosure of its team is not complete and the proportion of token trading has a poor market depth, with a reducing number of visitors. The average daily IP visitors in June has been reduced by about 50%.
At the end of July, there was a computer malfunction that caused transaction suspended, and this issue has been solved in eight hours.
CoinBene — [B → CCC]
CoinBene is an exchange registered in Singapore. More than 100 kinds of tokens are available on CoinBene, but less than 50% of listed tokens rank top 200 by market cap. The overall quality of tokens traded is relatively poor and it has lasted less than one year. The community is relatively active. The price of CONI, which is the platform token and listed on June, keeps declining. There is negative news relating to CoinBene. Its reliability is questionable.
OCX Exchange — [B → CCC]
OCX is a token exchange based in Singapore. At present, OCX has launched 42 types of tokens. There have been no major security accidents occurred in the past year. In terms of security, it has established the cooperation with Anheng storm center for the check of security of smart contracts. But the information disclosure of the team is limited and only simplified Chinese version is provided. Besides, the users are concentrated in certain regions. In the beginning, the “Transaction-Mining” mode has brought relatively large users. Yet, as the mining is proceeding, the price of tokens is declining and strikes are initiated by miners.
KuCoin — [BB]
KuCoin is a token trading platform established in July 2017 and is headquartered in Singapore. Its founding team members are mostly from Internet firms such as Ant Financial. From the cybersecurity aspect, the platform has formed cooperation in code audit with Chainan Technology and CertiK.
The platform currently supports more than 170 types of tokens but most is with limited trading volume. For example, in recent days, the platform’s total daily trading volume is around 20 million USD, and the top 3 trading pairs account for 20% of the total volume. 90% of the trading pairs on the platform has daily trading volume less than 0.1 million USD. On the other hand, the platform has an active community, and its users are widely distributed globally.
KuCoin recently has made progress on its Global Titan Ambassador Program which has recruited three ambassadors (NEO Global Capital，Breyer Labs and Ian Balina). Meanwhile, KuCoin is expanding its business in Australia, Belarus, and Estonia.
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