Not a Fee, But ‘Long-Term Payment’ — How Crypto Exchanges List Tokens

Visit the website of any stock exchange platform, like the Nasdaq or the New York Stock Exchange and the listing fees for new companies, are there to see. There is hardly any controversy when it is clearly stated like this, but the same cannot be said for the cryptocurrency space. Here, numerous reports show that crypto exchanges are being decidedly opaque about the structure of their listing fees.

Take Blockstack, for example, A recent filing with the U.S. Securities and Exchange Commission revealed a $250,000 payment to Binance in its listing of STX token. The cryptocurrency trading giant, however, denied reports that the payment constituted a listing fee.

Likewise, some major exchanges say they have no listing fees, but reports abound of projects being charged significant sums to have their crypto tokens added to the trading catalog. Other platforms looking to cash in on this goldmine reportedly engage in wash trading, obtain false trading volumes, and charge exorbitant fees for the right to list tokens on their platforms.

There are even suggestions that some exchanges go on to pump these tokens after charging the expensive fees. Once the tokens reach a certain price ceiling, a massive dump follows, and the exchanges purportedly make an extra profit.

As reported by BNC on Oct. 28, Blockstack’s SEC filing shows Binance receiving the sum of $250,000 tagged as a “long-term payment” to keep STX listed on the exchange for a year. Blockstack will also make three similar payments of 833,333 STX (currently worth $250,000) to cover for an additional three-year listing period plus an additional $100,000 marketing fee.

In total, Blockstack is committing to about $1.1 million in “fees” over a four-year period. This revelation calls into question a previous statement from Binance that it did not charge Blockstack any listing fee for adding STX to its platform.

BNC reached out to Binance to get a better understanding of the matter. According to a Binance spokesperson, the crypto exchange did not charge Blockstack any listing fee, and that “a long-term payment fee is an incentive proposed by Blockstack for Binance to keep the token listed on the exchange. This is a new payment fee proposed by Blockstack.”

The Binance spokesperson’s claim that the $250,000 payment was Blockstack’s idea was corroborated by Blockstack CEO Muneeb Ali, who told: “Their standard agreement has a listing fee which is called the ‘Technical Integration Fee’. The technical integration fee is $0 as publicly disclosed in the filing.” The Blockstack chief further revealed that the long-term payment was a unique agreement proposed by his company. According to the Blockstack CEO: This long-term payment is meant to watch out for the Blockstack ecosystem by incentivizing Binance to list Stacks over many years and aligns well with our long-term focus. The marketing fee is a joint marketing campaign that we plan to run later, again that is not a ‘listing fee’ but a marketing campaign that we plan to launch soon.”

So, to recap, Binance did not charge a listing fee for Blockstack’s STX token. However, Blockstack offered to pay $250,000 as long-term payment to keep its token on the Binance exchange. When asked about the platform’s standard listing practice regarding fees, the Binance representative revealed that the exchange does charge listing fees, though this long-term payment fee was not listing fee, adding that listing fees are usually charged to cover the cost of integrating a token into the platform.

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