Breaking: Binance Halts Bitcoin Withdrawals Due to Network Congestion
- Binance Exchange, the largest crypto trading platform in the world, announced the temporary suspension of Bitcoin (BTC) withdrawals on its platform for the second time.
- The sudden spike in the Bitcoin network gas fee has led to a lot of discomfort for traders as it has resulted in delayed transactions and high fees.
Binance, the world’s largest crypto exchange, has temporarily suspended Bitcoin withdrawals for the second time in 24 hours. The exchange cited an unexpected surge in the Bitcoin network gas fee as the reason. Binance has halted many pending transactions and is working to restore BTC withdrawals as soon as possible.
Currently, there are approximately 500,000 pending transactions on the Bitcoin network due to high gas costs. The recent developments have caused some selling pressure on Bitcoin, which has declined by over 2% in the last 24 hours and is currently trading at $28,228, with a market capitalization of $546 billion.
We've temporarily closed $BTC withdrawals as the #Bitcoin network is experiencing a congestion issue.
Our team is currently working on a fix until the network is stabilized and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
— Binance (@binance) May 7, 2023
Binance had previously suspended BTC withdrawals on May 7 for nearly 90 minutes due to congestion on the Bitcoin blockchain. As a result, the exchange’s volumes have surpassed $6 billion in the last 24 hours, which is five times higher than the next platform, OKX.
The exchange has reassured its investors that their funds are safe while informing them that they will replace the pending BTC withdrawal transactions with higher fees to ensure they are picked up by the mining pool. The exchange has announced on Twitter that its team is currently working to resume transactions within the next hour.
Binance said that they are also thinking to enable Bitcoin Lightning Network to help in such situations. It noted:
To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed. Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.
In early 2023, a protocol called Ordinals was introduced by Bitcoin developer Casey Rodarmor that enabled the creation of non-fungible tokens (NFTs) on the Bitcoin blockchain for the first time.
This has increased the number of transactions on the Bitcoin network. Hayden Hughes, the co-founder of social-trading platform Alpha Impact, has stated that Ordinals has caused a significant rise in network fees and congestion. Coincidentally, there has been a surge in the use of Bitcoin Taproot, which makes transactions anonymous, on Sunday. Colin Wu, a crypto journalist, explains that the adoption of Taproot has led to an increase in block sizes, resulting in higher transaction costs.
