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Binance again pauses Bitcoin withdrawals, cites congestion

Binance again pauses Bitcoin withdrawals, cites congestion
The Binance logo on a smartphone arranged in the Brooklyn borough of New York, US, on 14 February 2023. (Photo: Gabby Jones / Bloomberg)

Binance, the largest crypto exchange, temporarily paused withdrawals of Bitcoin for the second time in less than 12 hours, citing congestion on the token’s network. The digital asset extended a retreat.

The step was taken due to the “large volume of pending transactions” and “our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible,” Binance said on Twitter on Monday in Asia. 

We’ve temporarily closed #BTC withdrawals due to the large volume of pending transactions.

Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.

Rest assured, funds are SAFU.

— Binance (@binance) May 8, 2023

Bitcoin, the biggest cryptocurrency by market value, fell as much as 2.9% and was trading at about $28,280 as of 10:30am in Singapore. An index of the biggest 100 digital assets posted a similar decline.

Binance on Sunday halted Bitcoin withdrawals for about 90 minutes, blaming congestion on the token’s blockchain. The exchange is by far the largest in the digital-asset sector following the collapse of rival FTX last year. 

Volumes on Binance exceeded $6-billion in the past 24 hours, five times as much as the next nearest platform OKX, according to data from CoinGecko.

Earlier this year Bitcoin developer Casey Rodarmor released a protocol — called Ordinals — that helped people mint non fungible tokens on the network for the first time. That boosted transactions on the Bitcoin blockchain.

NFTs or digital collectibles are often based on Ethereum, crypto’s most important commercial highway. Their emergence on the Bitcoin network represents a new application of a blockchain that is better known for its store-of-value and payment functions.

Ordinals led to a “massive run up in network fees and congestion,” said Hayden Hughes, co-founder of social-trading platform Alpha Impact.

Binance in its tweets also used the crypto phrase “rest assured, funds are SAFU” to suggest that customer funds are safe. 

Last year’s crypto crash and bankruptcies like FTX undermined confidence in digital-asset platforms and skepticism continues to linger over the industry. Binance and rivals subsequently redoubled efforts to try to dispel worries about whether they have sufficient reserves. BM/DM


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