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Binance, the biggest cryptocurrency exchange in terms of trading volumes, has reportedly tightened criteria for token listings, as reported by Bloomberg, citing sources familiar with the matter. The objective behind these changes is to reinforce investor protection on the platform.
Binance last year agreed to pay a $4.3 billion U.S. dollars fine over money-laundering violations and is now placing more focus on investor protections rather than attracting coin listings, Bloomberg cited a Binance senior executive saying last month.
Sources privy to the matter revealed that crypto projects seeking listings on Binance now face stricter conditions. These include a prolonged "cliff period" during which the tokens cannot be sold, an increased allocation of coins for market makers and the necessity of a security deposit. These changes began implementation in the latter part of the previous year.
Tomiwabold OlajideSources added that Binance has communicated these changes verbally to stakeholders involved in token listings, and the specific requirements can vary from one deal to another.
Binance silently makes changes to token listing criteria
As part of changes in the token listing process, Binance is now mandating projects to agree to cliff periods extending to at least a year, compared to the previous maximum of six months, sources stated. Additionally, the exchange is demanding a larger proportion of tradable tokens to be reserved for market makers, ensuring sufficient liquidity in certain cases.
Responding to inquiries from Bloomberg, Binance emphasized that it does not enforce lock-in periods for listed projects, allowing each project to independently determine its token vesting schedule.
However, the company acknowledged the requirement for some projects to furnish a security deposit before listing tokens. These deposits, usually amounting to several million dollars, serve as a safeguard for Binance in cases where listing conditions are not met by the issuer.
Despite the stricter rules, the exchange's dominance in spot crypto trading seems unaffected, showing signs of recovery after a prolonged decline. Binance has notably expanded its lead in listings among prominent exchanges recently.
Alex Dovbnya
Arman Shirinyan
Vladislav Sopov
Dan Burgin
U.Today Editorial Team