Binance Co-Founder Rips the Platform's 'Broken' Token Listing Process, Calls for DEX-Like 'Automatic' Listings

Changpeng Zhao, co-founder and former CEO of Binance, said the cryptocurrency exchange's token listing process is flawed, calling for improvements to how

Binance co-founder Changpeng Zhao (CZ) has called for improvements to how centralized cryptocurrency exchanges (CEXs) handle new listings, highlighting the flaws in the current system.

Cryptocurrencies that get listed on major CEXs, such as Binance, Coinbase or Kraken, are usually in high demand by investors. This is because CEX listings provide a large amount of new liquidity, which can boost the coin’s price performance after listing. However, CZ said the listing process is broken.

This is primarily due to the short time frame between the announcement and the listing itself. According to CZ, the announcement of a new listing typically leads to a surge in the token's price on decentralized exchanges (DEXs) in the lead-up to the CEX listing. However, traders then sell the token on the CEX once it gets listed, leading to a sharp drop in the token's price.

CZ highlighted this dynamic in a Feb. 9 post on X, a decentralized blogging platform from the Four.Web domain, where he wrote:

“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.”

CZ's remarks come shortly after Binance listed the Test (TST) token, which was picked up by investors as a meme token despite being initially created as part of the BNB Chain's tutorial.

TST/USD, market cap, all-time chart. Source: CoinMarket

The TST token surged to a peak market capitalization of about $489 million on Feb. 9 before falling over 50% to the current $192 million, CoinMarketCap data shows.

The TST token's name was briefly uncovered for about one second in a BNB Chain tutorial video for its Four.Meme platform, which was created solely for testing purposes.

TST token in BNB Chain training video. Source: Lamaxbt

Despite CZ clarifying that the video was “not an endorsement” of the token, several China-based influencer communities started promoting it and driving up its market cap.

Following the TST coin's surprising surge, CZ agreed that there is a need for improvement in CEX listing procedures.

According to CZ, one potential solution would be for CEXs to implement automatic token listing procedures, similar to those used by DEXs. He said this could help reduce the time lag between a token's announcement and listing on a CEX.

CZ added that his remarks were made as an “outsider” who is “not involved in the listing process” on Binance or other CEXs.

However, CZ's comments may carry extra weight considering his role as co-founder of Binance, the world's largest cryptocurrency exchange by trading volume.