Binance, the world’s largest cryptocurrency exchange by trading volume, has suspended Bitcoin withdrawals for the second time in a day, citing a surge in the Bitcoin network gas fee.
The exchange announced on Twitter that it has paused “large volumes of pending transactions” and that its team is working to resume Bitcoin withdrawals as soon as possible. According to on-chain data, there are nearly 500,000 unconfirmed transactions on the Bitcoin network at the time of writing, due to high gas costs.
The unexpected events have put some downward pressure on Bitcoin, which has dropped more than 2% in the last 24 hours and is currently trading at $28,228 with a market capitalization of $546 billion.
On Sunday, May 7, Binance had also halted Bitcoin withdrawals for about 90 minutes, blaming congestion on the Bitcoin blockchain. As a result, volumes on the Binance exchange have soared to over $6 billion in the past 24 hours, five times more than the next platform OKX.
Binance assured its users that their funds are safe and that it is replacing the pending Bitcoin withdrawal transactions with higher fees so that they can be processed faster by the miners. The exchange also tweeted that it expects to resume transactions within the next hour.
Binance also said that it is considering enabling Bitcoin Lightning Network withdrawals, which would help in such situations. The Lightning Network is a second-layer solution that allows fast and cheap transactions on top of the Bitcoin blockchain. Binance stated:
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.
One of the possible reasons for the increased activity on the Bitcoin network is the launch of Ordinals, a protocol that allows creating non-fungible tokens (NFTs) on Bitcoin for the first time. NFTs are unique digital assets that can represent art, music, games, and other forms of creativity.
Ordinals was developed by Casey Rodarmor, a Bitcoin developer who wanted to bring NFTs to the original cryptocurrency. According to Hayden Hughes, co-founder of social-trading platform Alpha Impact, Ordinals has sparked a “massive run up in network fees and congestion” as more people are minting and trading NFTs on Bitcoin.
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