Is Binance Losing Its Credibility? Controversies Surrounding Token Listings and the Depegging of the FDUSD Stablecoin

These issues threaten to erode trust and challenge Binance's standing in the crypto industry.

As the dust settles on a week rife with controversies surrounding token listings, the depegging of the FDUSD stablecoin, and open allegations of unethical behavior, a crucial question arises: Is Binance losing its credibility?

A recent report by BeInCrypto highlighted the poor performance of tokens listed on Binance in 2023. Of the tokens listed on the platform this year, 89% have recorded negative returns by August 2023.

Out of the 174 tokens launched on Binance in 2024, only 48 have managed to generate positive returns, while the remaining 126 tokens have experienced losses.

Tokens listed on Binance were once viewed as a “launchpad” for new projects, but this year, this narrative appears to be changing.

Highlighting this point further, a recent analysis by Deep Web disclosed that most of the tokens listed on Binance in 2024 have also performed poorly.

According to the data, out of the 174 tokens launched on Binance in 2024, only 48 have managed to generate positive returns, while the remaining 126 tokens have experienced losses.

Moreover, the tokens that have managed to stay afloat and return positive percentages are relatively low, with most of them struggling to rise above 50% in 2024.

Highlighting the poor performance of these tokens, the analysis focused on highlighting the performance of one of the tokens that fell sharply after listing on the exchange.

This token is ACT, a meme coin that was recently listed on Binance and quickly experienced a downfall.

Earlier this week, Wintermute—a major market maker—dumped a large amount of ACT, exerting strong downward pressure on its price and leading to liquidations.

Furthermore, this move occurred after rumors circulated that Binance had allegedly prioritized listing scam coins to make huge profits.

Such criticism has led the community to believe Binance prioritizes listing fees over users’ interests.

This belief was reinforced when the FDUSD stablecoin became a hot topic due to its complete loss of peg and rumors of the bankruptcy of the company that issued it.

FDUSD dropped to $0.89 on Friday, having lost nearly all of its value.

However, what pushed the stablecoin further down was the withdrawal of 31.36 million FDUSD from Binance by Wintermute, one of the largest FDUSD holders outside of the exchange.

The move was spotted at 11:15 AM UTC as traders watched in horror as the stablecoin plunged to lows of $0.8870, having opened the day at $0.98.

But what pushed the stablecoin further down was the withdrawal of 31.36 million FDUSD from Binance by Wintermute, one of the largest FDUSD holders outside of the exchange.

The move was spotted at 11:15 AM UTC as traders watched in horror as the stablecoin plunged to lows of $0.8870, having opened the day at $0.98.

According to reports by Wu Blockchain, the huge withdrawal from Binance pushed the stablecoin even lower, with FDUSD threatening to fall below $0.87.

This incident sparked panic among traders, especially as rumors swirled about the bankruptcy of the company that issued FDUSD, TrustToken.

However, a community member claimed that some Binance employees leaked internal information about the FDUSD incident so they could select whale chat groups.

If true, this would severely damage Binance’s reputation and raise major questions about the platform’s transparency and ethics.

Overall, the community’s dissatisfaction is growing, with many users calling for a boycott of the exchange. Such negative reactions are shaking user confidence in the platform, which was once considered a symbol of credibility in the crypto space.

“Binance today caused massive liquidations on alts listed on their exchange. I warned you all yesterday about their very dirty tactics, specifically GUN. I refuse to use Binance #BoycottBinance,” wrote popular crypto YouTuber Jesus Martinez.

These accusations stem from a central issue that Binance prioritizes profits over user interests. Over the past few months, the community has constantly criticized its listing strategy, arguing that the exchange focuses on “shitcoins” to collect high listing fees without considering project quality.

Although the exchange recently introduced a community voting mechanism to decide on listings, this might not be enough to silence the criticism.

As a Tier-1 exchange, the company is evaluated based on trading volume, security, regulatory compliance, and community trust. However, recent events suggest that the exchange is struggling to maintain these standards.