Binance Resumes Bitcoin Withdrawals, Adjusts Fees To Prevent Future Congestion
Binance has resumed bitcoin withdrawals following a second pause, as the Bitcoin network experiences extraordinary congestion.
The crypto exchange temporarily halted bitcoin withdrawals for about two hours Sunday afternoon due to a record volume of unconfirmed transactions. Its second halt, which occurred in the evening, lasted slightly over two hours.
“[Bitcoin withdrawals are now resumed on [Binance],” the firm said in a tweet. “Pending transactions are being processed by replacing them with higher transaction fees.”
Citing heavy volumes and a surge in processing fees as reasons for the withdrawal halts, the crypto exchange said it has adjusted its fees to “prevent a similar recurrence in the future.”
The withdrawal pauses are said to be due to a glut of pending transactions because it hadn’t offered so-called miners a high enough reward to log the trades on the blockchain.
“Our set fees did not anticipate the recent surge in (bitcoin) network gas fees,” Binance said in an earlier tweet announcing the withdrawal halt. “We’re replacing the pending bitcoin withdrawal transactions with a higher fee so that they get picked up by mining pools.”
Gas fees are payments made to cryptocurrency miners whose processing power is used to execute transactions on the blockchain.
However, given the current crypto climate, many observers raised alarms on the exchange’s pause on bitcoin withdrawals. While many took “network congestion” as trading volume increasing past the exchange’s limit, Binance’s explanation outlined that the congestion occurred because there are less miners in the pool to accommodate the same trading volume.
The concern was heightened, however, by a number of factors, including a rumored $3.3-billion bitcoin withdrawal from the exchange prior to the halt and Robinhood also reportedly experiencing issues that caused bitcoin withdrawals to be delayed.
It didn’t help that the withdrawal halts happened amid the legal and regulatory issues Binance and its CEO Changpeng Zhao are currently facing. The development also comes on the heels of Binance.US pulling back of the $1.3 billion deal to acquire Voyager Digital, citing a hostile regulatory environment as the reason.
“The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community,” a spokesperson for Binance.US said in a statement. “We are focused on creating a safe platform where our customers can participate in the digital asset economy.”
Recently, a number of Binance customers have been sharing their experiences on Reddit of Automated Clearing House withdrawals missing and not reflecting in their bank accounts, some of whom are reportedly not getting any helpful information from Binance’s customer help desk.
Observers relayed that they regularly withdraw from Binance.US and it seems the delay in reflecting the withdrawal is related to the crypto exchange changing its processor Prime Trust to Plaid.
Information for this briefing was found via Coindesk, CNBC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
