Binance to stop listing meme coins?

Binance’s approach to meme coin listings is a crypto community conversation which is now joined by the former CEO Changpeng Zhao. CZ has voiced concerns about overemphasizing meme coins.

Is CZ trying to solve a problem? Or is he whitewashing concerns that Binance promotes “pump and dump” by listing low-market-cap tokens with questionable value? Meanwhile, the exchange role in driving the “Binance Effect” still remains.

CZ says meme coins are a ‘little weird’

Binance could take it slow when it comes to meme coin listings if we go by what CZ has to say. Changpeng Zhao, the former CEO of Binance, recently expressed concern about overemphasizing meme coins in the crypto market.

I am not against memes, but meme coins are getting "a little" weird now.

Let's build real applications using blockchain.

— CZ 🔶 BNB (@cz_binance) November 26, 2024

However, CZ did acknowledge that he is not against meme coins but the focus should be on building practical blockchain solutions. We have seen several cryptos with questionable value, intentions, and sustainability have been pumped and dumped.

CZ’s statement also comes days after NFT and crypto influencer Leonidas called out Binance. In a post on X, Leonidas accused Binance of engaging in unethical practices related to meme coin listings.

He alleged that Binance is promoting “pump and dump” schemes with listings of low-market-cap, poorly distributed tokens—like $ACT and $PNUT.  Binance dominates around 27% of the AI Prophecy (ACT) volume and 22% of Peanut the Squirrel (PNUT) volume, according to CoinGecko.

 ‘Binance Effect’ is still real 

ACT had a massive price rise of over 2000% in the last 30 days and has fallen over 30% in 2 weeks.  The trading volume is almost down by half as per data compiled by the platform.  PNUT has a similar story. It rode gains of close to 130% in 2 weeks but the last week lost around 35% of the rise. In 24 hours, the trading volume is reportedly down by 33%.

Considering Binance is the largest exchange by volume globally, several meme coins experience the “Binance Effect.” Post any listing, meme coins usually experience a positive shift in their price and popularity.

Leonidas says that the listing causes the value of meme coins to surge despite their lack of inherent value or activity. The influencer suggests that these tokens are often controlled by a small group of insiders who can afford to pay large listing fees to Binance. He stated, “If true this behavior incentivizes new memecoins to have unfair launches that line the pockets of insiders like VCs, CEXs, KOLs, and market makers,”

He further alleges that once these meme coins are listed, these tokens are allegedly dumped by Binance or those insiders, generating profits at the expense of retail investors. While Leonidas called for Binance to make changes to its listing process, several X users agreed. He even released a petition and asked Binance to disclose the listing fees, reveal token dumping schedules if tokens were received, and prioritize decentralized, community-driven tokens with fair distribution.

Cryptopolitan recently reported that Wintermute, a leading market maker for meme tokens, is an early indicator for Binance listings. At the time of writing, the meme coin market capitalization exceeds $121 billion. The art of this week has been a little slow for the sector with a one-day dip of around 7%. But, it is looking like a temporary pullback as the trading activity exceeds $28 billion. The top meme coins by market cap are dominated by Dogecoin (DOGE) and Shiba Inu (SHIB), which together account for nearly $70 billion of the market cap.

PEPE and BONK rose 100% in the past month on the back of strong speculative interest. CoinGecko’s largest gainers are Harold, GUA, and Big Dog Fink as community hype, social media trends, and trading interest led to triple-digit gains.

However, many fear that these playful origins which follow immense popularity often overshadow projects with meaningful use cases. While CZ has called out this very concern, Binance has been part of the problem. Previously, on-chain analyst Ai 9684xtpa revealed that  Binance listed 15 meme coins in 2024. According to the analyst, these listings primarily favored community-driven projects across networks like Solana (60%) and Ethereum (26.7%).

Touching upon the Binance Effect, Ai_9684xtpa underlined that 80% of these tokens saw major market cap growth post-listing. So much so that $NEIRO surged almost 7600%. Spot listings had stronger growth compared to futures, as per the analyst. So is CZ pushing to solidify Binance’s role in more meaningful listings? Or is it an attempt to whitewash the community allegations? It is hard to say. 

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