CZ Says Binance’s Token Listing Process is ‘Broken’

Binance founder and former CEO Changpeng “CZ” Zhao said he thinks Binance’s token listing process is “broken.”

In a long post reflecting on the TST memecoin situation, Zhao concluded that “the Binance listing process is a bit broken. They announce, then list 4 hours later. The notice period is necessary, but in those 4 hours, the token prices go high on DEXes, and then people sell on CEX…”

Noting that he was speaking as an observer and not for Binance, he added that he is “not sure there is a solution for this though.”

TST was created as an example token in a how-to video by Binance’s BNB Chain last week. The token went viral. Then Zhao posted to “clarify that TST was NOT endorsed by me/us. It was just a test token used in a video tutorial.”

But every post he made sent TST surging. Its market capitalization topped out at almost $500 million before retreating to its current $200 million. It remains a top 400 token, according to CoinGecko.

On Feb. 9, TST was listed on Binance.

‘A bit broken’

Responding to a comment about Binance’s listing process, Zhao said he thought centralized exchanges (CEX) “should list (almost) everything automatically,” just like decentralized exchanges (DEX).

“But, I am not running a CEX anymore,” he added.

This doesn’t change the reality that his 9.5 million X followers will speculate based on his comments.

While his presence on Crypto Twitter declined sharply after stepping away from the company as part of the settlement of anti-money laundering violations that also included a brief stint in prison, Zhao’s influence is clearly as strong as ever.

CZ doesn’t own memecoins

The whole TST explosion made Zhao feel he needed to explain his opinion about memecoins in a seven-part X post in which he reiterated that he is not “into” memecoins, but is not against them either.

While explaining that he is “entirely NOT involved” in Binance’s listing process anymore, Zhao said that the truth is most CEXs try to list tokens as soon as possible if they are hot and generate good trading volume.

If a “coin is actively sought after by traders, you don’t need to talk to exchanges. As I always say, work on your project, not the exchanges,” he added.

On the allure of memecoins

Zhao, who revealed that he holds Bitcoin and just one altcoin, BNB, shared his opinion on why people buy memecoins instead of altcoins that have utility.

For one thing, he pointed out that for years, the Securities and Exchange Commission “sued almost anyone with any utility token, falsely claiming they are securities,” so people turned to memecoins.

Secondly, some traders are speculators, he said, and it’s hard to speculate on something with a “clear tangible value,” so they stay away from them.

That’s something he said could be a challenge for tokenized real-world assets.

“For example, a building whose value doesn’t fluctuate much may not have a lot of trading activity,” Zhao said. “Then, it won’t have much liquidity, and the order book becomes thin, then even less trading activity, a vicious cycle.”

Thirdly, he added that memes are fun and there are “plenty of die-hard defenders of memes. Don’t go against the community.”

He wrapped up the post by saying it’s clear that there is a lot of money looking to invest in crypto, so there are lots of opportunities. He advised developers that they need to “build things people want.”