- A certain percentage of the entire coin supply will be locked up in a “smart contract.”
- Crypto projects would reportedly have to set aside additional coins for market markers.
Censoring listed tokens is one way that crypto exchange Binance is trying to keep its users secure. Cryptocurrency investors have fallen victim to rug pull schemes using unverified digital assets.
At the end of the day, investors lose millions of dollars due to these frauds. Regulators, who already see cryptocurrency as very risky, pay more attention to events like these.
Implementing New Reforms
Binance has decided to increase the bar for digital token listings in an effort to curb the emergence of fraudulent crypto projects, as reported by Bloomberg. Thus, in order to launch their token on Binance, crypto projects must first agree to a lengthy “cliff period” whereby a certain percentage of the entire coin supply is locked up in a smart contract.
During this period, the token would remain completely dormant and unable to be sold. In addition to a security deposit, this crypto project would reportedly have to set aside additional coins for market markers, according to anonymous sources acquainted with the situation.
Bloomberg states that Binance has been planning to make the switch for quite some time. Everyone who wants to list their tokens has been orally informed about the new regulation.
Keep in mind that different deals may have different conditions and criteria. The leading exchange is implementing these reforms at a time when it is still trying to recover from a turbulent 2023, during which it was fined heavily by the United States authorities.
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