Binance is facing scrutiny following the surprise listing of two Solana-based meme coins that were launched just weeks ago. Critics have accused Binance of enabling pump-and-dump schemes that unfairly benefit select traders at the expense of retail investors.
The exchange announced the listing of The AI Prophecy (ACT) and Peanut the Squirrel (PNUT) on November 11, which had a relatively low market cap and trading volume.
Binance Meme Coin Listing Sparks Controversy
Following Binance’s listing, both meme coins nearly tripled their market cap in less than 24 hours. ACT saw an unprecedented surge of over 1,000% in value, pushing its market cap beyond $400 million shortly after the listing.
Similarly, PNUT, a token inspired by the popular Peanut the Squirrel, experienced a 300% price increase. Following this, rumors started circulating about Binance insider trading.
The tweet has since been deleted, but it sparked significant scrutiny from the community.
Moreover there are allegations that Binance charged hefty fees to list these tokens. Despite these allegations, Binance co-founder Yi He mentioned that the exchange took zero listing fees for both these tokens.
At the same time, an on-chain analyst posted on X (formerly Twitter) that 12 out of 15 meme coins listed by Binance this year recorded significant value jumps post-listing. Examples include Moo Deng (MOODENG), Dogwifhat (WIF), and Popcat (POPCAT). Each of these tokens witnessed price gains exceeding 200% after debuting on the exchange.
This pattern has prompted Leonidas, co-founder of a popular Bitcoin Ordinals explorer, to launch a petition demanding more transparency and stricter criteria for meme coin listings. Leonidas claims Binance’s current approach amplifies market volatility, disproportionately impacting retail investors.
“We can only assume that Binance is specifically targeting low cap “dead” meme coins that are controlled by a small number of insiders because these are the ones that are able to pay the largest percentage of the supply as the listing fee which Binance then “dumps” to generate revenue,” said Leonidas in his post.
Historically, the exchange maintained a strict listing policy. But its recent inclusion of low-cap tokens signals a shift. Critics argue this new direction prioritizes short-term gains over long-term investor protection.
Legal Battles Continue
Beyond the meme coin controversy, Binance is also entangled in several legal disputes. Most recently, FTX has sued Binance and its former CEO, Changpeng Zhao (CZ), to recover $1.8 billion.
The lawsuit claims that Sam Bankman-Fried transferred these funds to Binance, CZ, and other executives as a part of their share repurchase deal in July 2021.
“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson told BeInCrypto.
The regulator’s lawsuit, initially filed in June 2023, alleges that the exchange violated US securities laws. These legal actions come as US regulators adopt a more aggressive stance on crypto enforcement. However, Binance and Zhao filed a motion to dismiss this complaint on November 4.
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