A temporary block on bitcoin withdrawals was lifted after Binance increased fees for pending transactions so that they would get picked up by miners.
Binance, the world’s largest crypto exchange, has resumed bitcoin withdrawals after halting in twice in less than 12 hours amid a “large volume of pending transactions”.
An increase in demand for bitcoin withdrawals is putting pressure on Binance systems, and the company says it did not anticipate the effect this would have on network gas fees, which are payments for crypto miners who use powerful computers to process blockchain transactions.
After temporarily closing bitcoin withdrawals in the early hours of the morning today (8 May), Binance lifted the block hours later after increasing the fees so that the pending transactions get picked up by mining pools.
“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,” the exchange wrote in a tweet.
“Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations. This is a learning opportunity for us, and we’ll do our best to prevent this from happening again.”
According to reports, the disruption had a mild impact on the value of bitcoin which plunged as much as 3pc before recuperating a little.
CryptoQuant data seen by Bloomberg shows that Binance had its highest ever daily outflow of bitcoin yesterday. Overall trading volumes on the platform in the last 24 hours has reportedly been in excess of $6bn – significantly higher than the exchange next in line, Coinbase.
“Rest assured, funds are SAFU [secure asset fund for users],” the company added in the tweet thread, assuring customers their funds are safe.
Binance, led by CEO Changpeng Zhao, has been facing regulatory turbulence around the world, particularly in the US.
In March, the exchange was sued by the US Commodity Futures Trading Commission for numerous alleged violations of US trading rules.
The civil enforcement action against Binance included Zhao and former chief compliance officer Samuel Lim, as well as the company’s Irish subsidiary Binance Holdings (IE) Limited.
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