The world’s largest centralized crypto exchange platform by trading volume, Binance, announced that it was stopping Bitcoin withdrawals for the second time in 24 hours, which caused concern in the cryptocurrency community.
Major cryptocurrencies like BTC and ETH saw price drops after the announcement.
Following Binance’s temporary suspension of Bitcoin withdrawals, which was announced Saturday night, both Bitcoin (BTC) and Ethereum (ETH) saw a slight decline in value over the weekend, with Bitcoin (BTC), the first cryptocurrency ever, down by 0.34% at $28,787 and Ether, the second-largest cryptocurrency by market capitalization, down by 0.4% at $1,913.
Less than 12 hours after issuing its initial advise, Binance issued a second announcement regarding stopping Bitcoin withdrawals, which led to a prolonged decline in the prices of Bitcoin, Ethereum, and other digital assets.
The decision had to be taken, the exchange noted in a tweet, due to the significant number of pending transactions. It then gave the crypto community comfort by announcing that it was working on a fix and would reopen $BTC withdrawals as soon as practicable.
By paying a higher fee so that transactions would be picked up by Bitcoin miners, the computer rigs that run the network, the exchange announced its intention to begin Bitcoin withdrawals in the following hour around approximately 11 a.m. ET on Sunday.
Data showed that Binance reported a net of 175,646 tokens on Sunday, its highest-ever net daily outflow of BTC.
Before the weekend’s end, BTC was trading at $28,070 after the second announcement, which further depressed its price by up to 3%. The 100 largest crypto assets also experienced a similar decline in value.
Following the second pause, Bitcoin withdrawals have resumed, according to the most recent warning from Binance.
Since the exchange halted withdrawals, there have apparently been 500,000 more unconfirmed transactions than there were when the first delay was first announced.
The exchange acknowledged that the incident was “a learning opportunity” and assured its users that it would try its “best” to stop a repeat of the same scenario.
Their fees have been modified, according to a tweet from Binance, to avoid a repeat of the situation in the future. They will keep an eye on on-chain activity and make adjustments as necessary.
Additionally, Binance revealed that its team has been working to enable BTC Lightning Network withdrawals, which will be useful in these circumstances.
However, the cryptocurrency community was not pleased with Binance’s decision, and several customers were urged to withdraw their money from exchanges. Others turned to accusing the exchange as starting the issue by not allowing lighting deposits.
As of 12:27 a.m. ET on Monday, Ethereum had lost 1.69% over the previous 24 hours and was trading at $1,864.63 with a 24-hour volume of $8,020,214,960.
On the other hand, the price of Bitcoin has remained at $28,000. According to the most recent statistics, it has also lost 2.24% over the last 24 hours and was trading in the red at $28,243.12 with a 24-hour volume of $13,018,293,793 at the same time.
