Binance’s decision to list Solana-based meme coins with low market caps has once again brought back allegations of pump and dumps. The exchange has been criticized for seeing 80% of meme coins listed by Binance in 2024 experience major price increases. Critics claim that Binance is hurting retail investors by giving privileges to insiders.

Binance sparked controversy in the cryptocurrency community on Nov. 11 by listing The AI ​​Prophecy (ACT) and Peanut the Squirrel (PNUT), coins with relatively low market caps and trading volumes.

Huge Price Gains After Binance Listing

After Binance listed, both meme coins gained a lot of value within 24 hours. ACT token saw a 1000% increase in market value, reaching $400 million in just a few hours. PNUT token gained 300%. However, after this rapid increase, an insider trading claim came to the fore. A tweet shared that Binance charged a significant listing fee for meme coins sparked discussions within the community. However, Binance co-founder Yi He denied the allegations, stating that the exchange did not charge any listing fees for these tokens.

Meme Coins and Market Volatility

Noting that 12 out of the 15 meme coins listed by Binance this year have seen major price increases, one on-chain analyst noted that tokens like Moo Deng (MOODENG), Dogwifhat (WIF), and Popcat (POPCAT) have gained over 200% in value after listing. This has been criticized in particular by Bitcoin Ordinals co-founder Leonidas, who announced that he plans to launch a petition to demand greater transparency and stricter criteria for Binance’s meme coin listings. Leonidas argued that Binance’s current listing approach increases market volatility and disproportionately impacts small investors.

“We can assume that Binance is targeting ‘dead’ meme coins with low market caps. These coins are controlled by an insider group that is able to pay a large portion of their supply as listing fees, allowing Binance to profit from these fees,” Leonidas said, suggesting that Binance’s approach does not protect long-term investors.

Change in Binance Listing Policies

Historically, Binance has followed a strict listing policy, but the recent listing of tokens with low market caps suggests a shift in the exchange’s policies. Critics claim that Binance’s new strategy prioritizes short-term gains over long-term investor protection.

Beyond the meme coin controversy, Binance is also currently facing several legal issues. FTX has filed a $1.8 billion buyback lawsuit against Binance and its former CEO Changpeng Zhao (CZ). The lawsuit alleges that Sam Bankman-Fried transferred these funds to Binance and its executives as part of a stock buyback agreement made in July 2021.

While Binance has yet to make an official statement on the case, the exchange and CZ are pursuing a separate lawsuit with the U.S. Securities and Exchange Commission (SEC). The lawsuit, filed in June 2023, alleges that Binance violated U.S. securities laws. The case comes at a time when U.S. regulators are increasing their scrutiny of the cryptocurrency industry. Binance and Zhao filed a motion to object to the SEC’s complaint on Nov. 4.

These developments create increasing uncertainty amid Binance’s short-term earnings targets and legal battles, and continue to be closely watched in the cryptocurrency market.