Binance under fire for allegedly listing pump-and-dump memecoin schemes

Crypto community members have raised concerns over Binance’s listings of Solana-based memecoins—The AI Prophecy (ACT) and Peanut the Squirrel (PNUT)—alleging a possible pump-and-dump scheme.

On Nov. 11, Binance, the world’s largest crypto exchange by trading volume, unexpectedly listed these low-market-cap memecoins, helping to boost their values and market caps rapidly.

Following the Binance listing, ACT surged by over 1,000% to reach a market cap of more than $400 million, while PNUT—a coin celebrating the viral internet character Peanut the Squirrel—also experienced a substantial rise in value of around 100%, according to CoinMarketCap data.

‘Pump and dumps’

This development led Leonidas, co-founder of the Bitcoin Ordinals explorer Ord.io, to initiate a petition challenging Binance’s listing strategy for memecoins. He claimed that Binance’s memecoin listing process promotes “pump and dump” schemes, which harms retail investors while favoring select insiders.

Leonidas pointed to the exchange’s recent memecoins token listings as examples of tokens that had previously seen minimal activity but were listed by the exchange. He stated:

“We can only assume that Binance is specifically targeting low cap ‘dead’ memecoins 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.”

Leonidas argued that if true, such practices incentivize unfair launches that benefit insiders like venture capitalists, centralized exchanges, key opinion leaders, and market makers, who can then profit by quickly exiting their positions.

Due to this, he called on the exchange to disclose the terms of its listing fees publicly while specifying whether any expenses are paid in tokens and clarifying any planned token sales.

Why Binance might be embracing memecoins

Loopify, the pseudonymous founder of a crypto game studio, weighed in on the conversation, suggesting Binance may be loosening its listing standards to prevent users from moving to decentralized exchanges.

Over the past year, Binance—traditionally strict with its listing policy—seems to have relaxed these standards, listing several memecoins that have since rapidly gained value.

Notably, on-chain analyst Ai_9684xtpa pointed out that 12 out of 15 (or 80%) memecoins listed by Binance in 2024 saw notable price increases after their listings.

The analyst also noted that 60% of memecoins listed on Binance in 2024 were built on Solana, with 26.7% on Ethereum and the remainder on Binance’s BNB Smart Chain and the Base network. Among these listings, only five tokens are available for spot and futures trading, suggesting Binance’s relative caution on spot listings.

Based on the data, the analyst suggested that Binance does not enforce a minimum market value requirement for memecoin listings. Instead, factors like community support and popularity appear to play a more significant role in determining which memecoins make the cut.

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