- The Bitcoin network is experiencing congestion.
- Binance has paused withdrawals on the network.
- The crypto exchange raised fees for pending transactions.
Congestion on the Bitcoin network has led Binance to pause Bitcoin withdrawals twice in just a few hours. In the latest instance, the crypto exchange has been forced to raise fees for pending transactions.
Binance Forced To Raise Fees
On Monday, May 8, Binance disclosed that it had paused Bitcoin withdrawals in less than 24 hours for the second time, again citing Bitcoin’s network congestion.
Binance revealed in a follow-up tweet that it was forced to place higher fees on pending withdrawal transactions to better compete for block space and get transactions verified by miners.
The leading crypto exchange had paused Bitcoin withdrawals about 10 hours before, on Sunday, May 7, citing similar reasons.
Ordinals to Blame? Binance Concerns Rise
The crypto exchange disclosed that several Binance transactions were still pending on the Bitcoin network as it had not anticipated the recent fee surge.
At the time of writing, over 444,000 transactions are pending on the Bitcoin network per mempool.space data, surpassing the levels seen in the previous two bull market cycles. The rise in block space demand has been blamed on the growing adoption of Bitcoin Ordinal inscriptions.
The pauses had unsurprisingly sparked concerns about the health of the crypto exchange, especially as data showed a significant Bitcoin outflow of over 127,000 BTC from the crypto exchange. Binance has dismissed this as an internal rotation of funds, sharing DeFiLlama data to back up its claim.
On the Flipside
- Binance has said that Bitcoin withdrawals have resumed.
- The crypto exchange plans to implement Bitcoin Lightning Network withdrawals to tackle congestion in the future.
Why You Should Care
The recent Binance Bitcoin withdrawal debacle highlights users’ limited control over their funds when placed on centralized platforms.
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