Binance, the world’s top cryptocurrency exchange by volume, put Bitcoin withdrawals for its users on pause because of a “stuck on-chain transaction,” the company said Monday.
Although Binance CEO Changpeng “CZ” Zhao initially announced that the situation would be remedied in around 30 minutes, he followed up with a reply shortly after saying that the exchange’s fix would take “a bit longer” than the initial estimates. Users' funds, he stressed, are "SAFU."
In the event, withdrawals were resumed at 11:30am EST, some three and a half hours after CZ's initial tweet. However, Binance noted that it was "still working to process the pending Bitcoin (BTC) network withdrawals," over the next few hours, and that pending network withdrawals would be rejected during that period. Binance advised users who encounter the issue to resubmit their orders once transactions start flowing again.
During the downtime, Binance’s Twitter account clarified that users could use other networks to withdraw their Bitcoin, including Ethereum or Binance’s own BNB network, stating that those blockchains were functioning normally at the time of the notice.
A statement from Binance following Zhao’s initial tweet references a “batch of transactions” that were unable to be processed using Bitcoin, while Zhao singled out a singular transaction earlier this morning.
The transactions became stuck because they were submitted to the exchange with “low transaction fees,” which resulted in the creation of a backlog of Bitcoin withdrawals, the company said in a blog post on its website.
The exchange's announcement came amid a market crash that saw the total market cap of all cryptocurrencies slip below $1 trillion, and Bitcoin drop to levels not seen since 2020.
This isn’t the first time Binance has suspended users’ ability to conduct cryptocurrency transactions on its exchange or experienced downtime.
Today, Binance also stated it would not enable users to conduct deposits or withdrawals with Litecoin using MimbleWimble Extension Blocks (MWEB), a newly-added feature to the protocol that enables confidential and anonymous transactions using its cryptocurrency.
Last month, the company put withdrawals of Terra’s LUNA and UST on hold as both coins collapsed due to the depegging of Terra’s UST stablecoin. Transactions in both coins were halted for three days before trading resumed.
During that period of time the market capitalization of LUNA (renamed to Luna Classic or LUNC) declined by over 97%, to around $236 million from nearly $11.5 billion, according to data from CoinMarketCap.
In November 2021, the exchange temporarily paused withdrawals for all cryptocurrencies on its platform due to a large backlog of transactions. On that occasion, the network was able to resume transactions after less than half an hour of downtime.
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