Changpeng Zhao Admits Flaws in Binance’s Token Listing Process, Suggests Automating Listings Like Decentralized Exchanges
Changpeng Zhao, the co-founder and former CEO of Binance, has acknowledged shortcomings in the cryptocurrency exchange’s token listing process, stating that it is flawed and in need of reform. He emphasized that the current system used by centralized exchanges (CEXs) to evaluate and approve new tokens lacks efficiency and transparency, which can lead to delays, inconsistencies, or potential biases in listing decisions.
Zhao called for significant improvements in how CEXs handle new listings, suggesting that exchanges should adopt a more structured and automated approach, similar to the listing mechanisms used by decentralized exchanges (DEXs). Unlike CEXs, which often have a rigorous and sometimes opaque vetting process, DEXs allow permissionless token listings, enabling projects to launch without requiring direct approval from a centralized authority.
By advocating for reforms, Zhao aims to create a fairer, more efficient, and transparent listing process, ensuring that projects are evaluated based on merit rather than subjective criteria. His comments highlight an ongoing debate within the crypto industry about balancing security, regulatory compliance, and accessibility when listing new digital assets on trading platforms.
Cryptocurrencies that secure a listing on centralized exchanges (CEXs) such as Binance, Coinbase, or Kraken often experience increased demand from investors. This is because CEXs provide significant liquidity, which can drive up a coin’s price performance following its listing. The added exposure and accessibility offered by these major platforms make them highly desirable for projects looking to gain traction in the market.
Flawed Listing Timing Creates Volatility
However, Changpeng Zhao (CZ) has criticized the current listing process, arguing that it is flawed—primarily due to the short time frame between the announcement and the actual listing.
“As an observer, I think the Binance listing process is a bit broken,” Zhao stated in a Feb. 9 post on X. “They announce, then list four hours later. The notice period is necessary, but in those four hours, token prices surge on decentralized exchanges (DEXs) as traders speculate on the upcoming CEX listing. Then, once the token is listed on the CEX, many investors sell off their holdings, leading to price volatility.”
His remarks highlight a major issue in the crypto market—the pre-listing price surge on DEXs, followed by a dump on CEXs, creating an unfair advantage for early traders. Binance Zhao’s comments suggest a need for a more structured and transparent listing process to mitigate speculation and ensure a more balanced trading environment.
Experienced traders primarily use decentralized exchanges (DEXs) to discover emerging cryptocurrencies before centralized exchanges (CEXs) officially list them. For many traders, a CEX listing announcement serves as a short-term buy signal, prompting them to purchase the token on a DEX in anticipation of a price surge. However, once the token becomes available on a CEX, these traders often sell off their holdings, creating significant selling pressure and leading to price volatility.
Changpeng Zhao’s (CZ) comments follow Binance’s recent listing of the Test (TST) token. This token was first made for a BNB Chain tutorial but unexpectedly became popular with investors who treated it like a meme token. This shows how unpredictable and driven by speculation token listings in the crypto market can be.
