Binance Halts Bitcoin Withdrawals due to Pending Transactions
Crypto exchange Binance has temporarily halted Bitcoin (BTC) withdrawals for the second time following concerns over a large backlog of pending withdrawals. On May 8, the exchange tweeted that it had closed off BTC withdrawals “temporarily” as there was a “large volume of pending transactions.” The tweet further stated that the transactions were still pending, as their “set fees did not anticipate the recent surge in [Bitcoin] network gas fees.”
Binance provided an update almost two hours later and said that it was “replacing the pending [Bitcoin] withdrawal transactions with a higher fee so that they get picked up by mining pools.” The exchange resumed Bitcoin withdrawals with pending transactions being processed with higher transaction fees three hours after its initial tweet. The exchange further added that it was working on enabling withdrawals via the Lightning Network, which could help mitigate such withdrawal halts in the future.
This is not the first time Binance has had to temporarily suspend Bitcoin withdrawals. On May 7, the exchange claimed that there was an overflow of transactions on the blockchain and temporarily suspended withdrawals, reopening it over an hour and a half later. At the time, the Bitcoin mempool had a backlog of around 400,000 transactions waiting to be processed. That swelled to nearly 485,000 at the time of Binance’s second withdrawal halt, according to data from mempool.space.
A spokesperson for Binance told Cointelegraph that the exchange had “no additional details to add at this time.” According to data from CryptoQuant, Binance saw significant Bitcoin net negative outflows on May 7, with around 175,650 BTC worth around $4.95 billion flowing from the exchange on the day. Binance claimed this outflow data was actually the movement of Bitcoin between its hot and cold wallets.
The price of Bitcoin has also fallen around 3.5% from its weekly high of over $29,700 on May 6, as per Cointelegraph data. To prevent similar recurrence in the future, Binance has adjusted its fees and will continue to monitor on-chain activity and adjust accordingly if needed.
Update:
This article has been updated with additional information from Binance about why it suspended withdrawals, data from CryptoQuant showcasing Bitcoin net negative outflows, and Bitcoin price data. It has also been updated with further information from Binance and a response from a Binance spokesperson.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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