The crypto community has voiced concerns over Binance’s decision to list two Solana-based memecoins — The AI Prophecy (ACT) and Peanut the Squirrel (PNUT) — with some accusing the exchange of engaging in a potential pump-and-dump scheme.

On November 11, Binance, the largest crypto exchange by trading volume, unexpectedly listed these lesser-known memecoins. The listing caused a sharp increase in their prices and market capitalization.

After the Binance listing, ACT’s price skyrocketed by over 1,000%, pushing its market cap past $400 million. Meanwhile, PNUT — a memecoin based on the viral internet character Peanut the Squirrel — also saw its value jump by around 100%, as reported by CoinMarketCap.

This sudden rise in value prompted Leonidas, co-founder of the Bitcoin Ordinals explorer Ord.io, to create a petition questioning Binance’s approach to listing memecoins. He argued that Binance’s memecoin listing process promotes “pump and dump” schemes that benefit insiders while hurting regular retail investors.

Leonidas pointed out that many of the recently listed memecoins had little activity before being added to Binance. He speculated that Binance may be targeting low-market-cap coins controlled by a small group of insiders because these coins can pay a large portion of their supply as a listing fee. He claimed Binance could then sell off these tokens to generate revenue.

He further argued that if this is true, it would allow insiders like venture capitalists, centralized exchanges, key influencers, and market makers to profit quickly by selling their tokens after a price surge. Leonidas called on Binance to publicly disclose its listing fees, including whether any are paid in tokens and if there are plans to sell those tokens.

Loopify, a pseudonymous founder of a crypto game studio, also joined the conversation. He suggested that Binance might be loosening its listing standards to prevent users from moving to decentralized exchanges.

In recent times, Binance — known for having strict listing policies — seems to have relaxed these rules, allowing several memecoins to be listed that have since experienced quick price increases.

On-chain analyst Ai_9684xtpa highlighted that in 2024, 12 out of 15 memecoins (or 80%) listed by Binance saw notable price spikes after their listings. The analyst also noted that 60% of these memecoins were built on Solana, with others built on Ethereum, Binance’s BNB Smart Chain, and the Base network.

Interestingly, out of all these listings, only five tokens are available for both spot and futures trading on Binance. This could suggest that Binance is being more cautious with which tokens it allows for broader trading.

The analyst concluded that Binance doesn’t seem to enforce a minimum market value requirement for listing memecoins. Instead, factors like community support and popularity play a bigger role in determining which coins make it onto the platform.