Binance, listing fees, charity and corruption: DigiByte founder clears the air
In a recent article, CryptoMurmur took time to examine corruption and complacency in trading practices on cryptocurrency exchanges around the world. The article focused on issues surrounding wash trading, spoofing, and insider trading — problems to which many crypto exchanges turn a blind eye due to the fact that they stand to make significant profits, thanks, at least in part, to these corrupt practices.
One topic that was not mentioned in the article, but is certainly an issue, was listing fees. Exchanges have been known to demand large sums of money and significant stakes in projects in exchange for the privilege of being listed. These negotiations tend to remain hush-hush as projects would jeopardize their chances of being listed if they complained or if they criticized the gatekeepers of considerable potential profits, availed through the opportunity of listing on prominent exchanges.
So, a few popular exchanges are in a position of significant power over crypto projects and can comfortably demand large sums of money due to their huge influence over the market.
Speaking of powerful crypto exchanges, few garner more attention than Binance, an exchange that just announced the establishment of a charity to which it will be donating its listing fees. This charity is being created by Binance, called the BCF (Blockchain Charity Foundation). For details of the architecture of this charity, have a look at this article. Needless to say, it seems a little suspect for a company to give “donations” from what were once considered fees they collected to a charity that is of its own creation. To be fair, the charity could well end up being beneficial to the larger blockchain community, adding greater transparency to charitable donation practices and encouraging the furtherance of blockchain development as a whole.
It was the announcement of the establishment of this charity that seemed to be the final straw for DigiByte’s founder, Jared Tate, who finally took to Twitter to vent, recounting his team’s experience with the Binance listing process.
It wasn’t pretty.
Tate began by stating that it was time to “set the record straight”, with DigiByte refusing to pay the Binance listing fee last summer and fall, and continuing to refuse to pay it since then. Tate explained that Binance had promised a DGB listing on several occasions, but it never came to pass, despite several successful Twitter polls, massive community interest, and the clear legitimacy of the project. He went on to criticize Binance’s treatment of DGB compared to other less deserving projects, especially considering the numerous applications and “ridiculous and unprofessional hoops” that were jumped through in the hopes of getting DGB listed. Hypocritically, many fraudulent ICOs were added with little effort on their part, only to be pumped and dumped on Binance, according to Tate, as evidenced in trading charts he posted. Ending the Twitter rant, Tate explained that he was told that if he publicly apologized for his mistakes — refusal to pay what he called bribes, and for calling out blatant pump and dump activity — that Binance would consider adding DGB in a few months (source). It looks now like that ship has sailed; such a listing would be highly unlikely, given the circumstances.
It’s clear that the cryptocurrency market — and movement as a whole — has a corruption problem. As long as exchanges, banks, or any other central powers can dictate who gets what, there will be those in positions of power who will use it to their advantage.
This whole situation points to a solitary solution: decentralization — not just of exchange architecture or select elements of exchanges — but of the entire exchanging process.
The time will come that exchanges will no longer exist as we imagine them. Instead, users will be able to freely swap coins for coins and tokens for tokens, from peer to peer in a free market, unfettered by corruption and central manipulation. At that point, gatekeepers no longer serve any purpose. It may be a ways off, but we’ll get there eventually.
The first step? Acknowledging the problem.