Changpeng “CZ” Zhao, the founder and former CEO of Binance, has spoken out about the issues surrounding the exchange’s token listing process. Reflecting on the recent surge of the TST memecoin, he described the current system as “a bit broken.”
According to CZ, the short notice period before a token gets listed on Binance leads to rapid price spikes on decentralized exchanges (DEX) before trading begins on centralized exchanges (CEX), creating an unstable market environment.
The TST Memecoin Phenomenon
The controversy began when Binance’s BNB Chain created TST as a test token for a tutorial video. Unexpectedly, it gained massive attention, leading to speculative trading that sent its market capitalization soaring to nearly $500 million before settling at around $200 million.
Despite CZ’s repeated clarifications that neither he nor Binance endorsed the token, every comment he made seemed to fuel further speculation. The situation highlighted how influential his words remain, even after stepping down as Binance’s CEO.
CEX vs. DEX: The Listing Debate
CZ suggested that centralized exchanges should consider listing almost every token automatically, similar to how decentralized exchanges operate. However, he acknowledged that he no longer runs a CEX and admitted that finding a perfect solution to the listing challenges might not be possible.
He emphasized that exchanges are primarily driven by market demand, and if a token is popular among traders, it will naturally get listed.
Memecoins vs. Utility Tokens
In a separate discussion, CZ addressed the growing popularity of memecoins over utility tokens. He pointed out that regulatory challenges have made it difficult for projects with real-world use cases to thrive. The U.S. Securities and Exchange Commission (SEC) has targeted many utility token projects, which has driven traders towards memecoins instead.
Additionally, he explained that speculation plays a significant role in crypto trading. Investors often prefer assets with high price volatility over stable, tangible-value projects like tokenized real estate. Memecoins also have strong communities, making them attractive for traders looking for active market engagement.
Future of Crypto Investments
Despite his criticisms of the listing process and the unpredictable nature of memecoins, CZ remains optimistic about the crypto space. He believes there is significant capital waiting to be invested and advises developers to focus on building projects that people genuinely want.