← Go back May 05, 2023
SINGAPORE – Binance, the world’s 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”, Binance said on Twitter on Monday in Asia, adding that its team was “working on a fix” and would reopen Bitcoin withdrawals as soon as possible. Just after 11am Singapore time, the company tweeted that it aimed to reopen withdrawals in the next hour by paying a higher fee so pending transactions get picked up by Bitcoin miners, the computer rigs that operate the network. Binance on Sunday halted Bitcoin withdrawals for about 90 minutes, blaming congestion on the token’s blockchain. Data from CryptoQuant showed that the platform saw its highest net daily outflow of Bitcoin – a net 175,646 tokens – on May 7. Bitcoin, the biggest cryptocurrency by market value, fell as much as 3 per cent and was trading at about US$28,070 as at 11.45am in Singapore. An index of the biggest 100 digital assets posted a similar decline. Binance is by far the largest exchange in the digital asset sector after the collapse of rival FTX last year. Volumes on Binance had exceeded US$6 billion (S$8 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 (NFTs) on the network for the first time. This 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 Mr Hayden Hughes, co-founder of social trading platform Alpha Impact. Binance in its tweets also suggested that customer funds were safe. Last year’s crypto crash and bankruptcies, like that of FTX, undermined confidence in digital asset platforms, and scepticism continues to linger over the industry. Binance and rivals subsequently redoubled efforts to try to dispel worries about whether they have sufficient reserves. At the moment, the withdrawal fees charged by exchanges are not sufficient to cover the fees charged by miners, said Mr Stefan von Haenisch, head of sales trading at OSL SG in Singapore. “The queue of transactions pending verification for inclusion in the blockchain has experienced significant growth in recent days, causing an increase in transaction fees and confirmation times,” he said. BLOOMBERG
Read more: straitstimes
