Changpeng Zhao, co-founder and former chief executive officer of Binance, stated that the listing process on cryptocurrency exchanges contains disadvantages.
In the context of the mentioned statement, Mr. Zhao also called for improving the practice of handling new listings by centralized exchanges (CEXs).
Cryptocurrencies that manage to be listed on CEXs, such as Binance, Coinbase, or Kraken, are characterized by a high level of demand among investors. The relevant circumstance is because the mentioned platforms provide significant new liquidity to customers. In this case, the price of the coin may show an increase after listing. Changpeng Zhao stated that the mentioned process is broken. According to him, in this case, the main factor of the negative impact was the short period between the announcement and the listing.
Changpeng Zhao noted that as an observer, he noticed that the listing process on Binance was slightly broken. In this context, it was noted that the process of the listing begins 4 hours after the announcement. He stated that the notice period is necessary, but at the same time, it was emphasized that in the mentioned 4 hours, token prices on DEXs (decentralized exchanges) will rise, after which people will sell on CEX. The relevant point of view is set out in a publication that Changpeng Zhao posted on the social media platform X last Sunday, February 9th.
DEXs are generally used by experienced traders to identify emerging cryptocurrencies before listing on CEX. These actions are often a short-term buy signal for DEX traders. They sell the token as soon as the corresponding digital asset is listed, provoking significant pressure from sellers.
Changpeng Zhao’s statements were made after Binance listed the Test (TST) token. Investors picked up this digital asset as a meme token. It is worth noting that the mentioned token was originally created as part of the BNB Chain’s tutorial.
Data from CoinMarketCap indicates that as of February 9, the TST token has temporarily grown to its maximum market capitalization of $489 million. Then the token found itself on a trajectory of rapid decline from the point of view of the mentioned indicator. The market capitalization dropped by more than 50%, to the current $192 million.
The name of the TST token was briefly uncovered for about one second in the BNB Chain tutorial video for its Four.Meme platform, solely for test purposes.
Despite Changpeng Zhao’s clarification that the mentioned video is not an endorsement of the token, Chinese-based influencer communities have begun promoting the digital asset and driving up its market capitalization.
After the unexpected surge in the TST coin, Mr. Zhao agreed that listing procedures at CEX needed to be improved. In his opinion, in this case, part of the solution to the problem may be the implementation of automatic token listing procedures similar to DEXs. Changpeng Zhao believes that CEX should list almost everything automatically. In the context of the relevant statement, the Binance co-founder noted that he is not running a CEX anymore.
Changpeng Zhao separately underlined that his remarks came from an outsider who is not involved in the listing process on Binance or other CEXs.
As noted by the media, in recent years there has been an increase in concerns about the practice of listing on CEX. As of May 2024, more than 80% of tokens listed on Binance have lost value in the first six months after launch.
However, the decentralized launch of the Hyperliquid (HYPE) token may usher in a new era for cryptocurrencies at the on chain fair launch after the project staged the most valuable airdrop in the history of digital currencies in excess of $7.5 billion.
Vitali Dervoed, co-founder and chief executive officer of Composability Labs, stated during a conversation with media representatives that the launch of the HYPE token is the beginning of a new era between centralized exchange listings and onchain. Also in this context, it was noted that the token’s debut was launched by protocol on its order book on its own layer 1.
As we have reported earlier, Binance CEO Says Bitcoin to Hit New All-Time High in 2025.
