Global cryptocurrency exchange Binance temporarily suspended Bitcoin (BTC) withdrawals twice within 24 hours due to network congestion and rising transaction fees, sparking concerns among traders.
Key Events
- Binance halted BTC withdrawals for several hours before increasing withdrawal fees
- The exchange cited low miner fees causing transaction backlogs
- Bitcoin prices dipped slightly following the announcement
Official Statement
Binance explained via Twitter:
"Our initially set fees didn't account for the recent spike in Bitcoin network gas fees. Many withdrawal transactions remain unprocessed. We're reprocessing these with higher fees."
Understanding Gas Fees
Every blockchain transaction requires gas fees paid to miners. Joshua Chu, Group Chief Risk Officer at XBE, noted:
"Large withdrawals require higher gas fees, especially during network congestion. We've adjusted fees to prevent recurrence. More information is needed about the withdrawal surge."
Background Information
- Service resumed by 12:00 PM UTC Monday
- Binance denied large-scale fund outflows
- March 2023: Binance paused deposits/withdrawals citing technical issues
- Regulatory action: CFTC charged Binance and CEO Changpeng Zhao with operating illegal derivatives exchange
Market Dominance
- $6.9 billion 24-hour trading volume (8× larger than Coinbase)
- Processes more BTC transactions than any other exchange
FAQ Section
Q: Why did Binance pause Bitcoin withdrawals?
A: Due to unprocessed transactions caused by insufficient miner fees during network congestion.
Q: How long were withdrawals paused?
A: Several hours during each of the two incidents.
Q: What changed when service resumed?
A: Binance increased withdrawal fees to ensure transaction processing.
Q: Has this happened before?
A: Yes, in March 2023 for technical reasons.
Q: Were funds at risk during the pause?
A: Binance confirmed no unusual outflows occurred.
Q: How does this affect Bitcoin prices?
A: Typically causes short-term price dips during service interruptions.
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Market Risk Disclaimer: Cryptocurrency trading involves substantial risk. This content doesn't constitute investment advice.