Binance has publicly claimed that it does not earn any profits from listing tokens on its platform. This exchange found itself in a controversy after Limitless Labs CEO, CJ Hetherington, alleged that the exchange actually demands a significant portion of an upcoming token’s supply as a listing fee.
“Binance does not make money from the listing process. All project token allocations go 100 percent to users through marketing campaigns, including Alpha Airdrops, Launchpool, Hodler Airdrops, trading events, Earn APR campaigns, and more,” the official X handle of Binance shared on Wednesday, October 15.
Details on the controversy
On October 14, Hetherington posted a breakdown of what Binance demands to market upcoming tokens and list them on its internationally licenced platform. Hetherington alleged that Binance had indirectly asked for eight percent of Limitless Labs’ upcoming token supply as part of its listing fee.
As part of the breakdown, the Limitless Labs’ CEO said Binance asked for one percent and three percent of its token’s supply to airdrop to its community over a period of six months. He further added that Binance asked to reserve three percent of the supply for the BNB HODLer programme community alongside a one percent chunk as the “marketing” fee.
Hetherington further claimed that Binance’s offer additionally came with a demand of $250,000 worth of tokens as a security deposit plus tokens worth $200,000 for Binance affiliate marketers and $2 million worth of BNB tokens for spot listing security deposit.
Sharing this breakdown, Hetherington said he preferred to select Coinbase for token listing, insinuating that a deal with Binance could bring profits to the exchange and losses to the potential listers.
“Offer from CoinBae, build something meaningful on Base yet people still ask me ‘why build on base’.. Isn’t it obvious?” his post said.
The allegations by Hetherington caught the attention of Binance, following which it decided to address the situation.
“Our business model is simple: small trading fees, not listing revenue.To protect users, Binance requires a refundable security deposit from projects. It acts as a safeguard against short term exploitation and ensures the project team stays committed post listing. Once a project meets its commitments, the full deposit is returned,” the exchange, touted as the largest in the world, said in its defense.
Binance co-founder Yi He, who presently serves as the Chief Customer Service Officer at the exchange, also entered chat and said that aggressively pursuing a token listing on Binance is not the right way.
“If you have a solid project, the right way to approach Alpha isn’t to aggressively pursue token listing. You’ll discover it’s actually the optimal path for acquiring seed users and launching new products to market,’ He said.
Binance posted a detailed blog to explain its reasons and requirements for the different kinds of paths that projects can take to get their tokens listed on the exchange. Hetherington, for now, has not responded to Binance’s explanation.