After Celsius was temporarily halting Bitcoin withdrawals due to the liquidity crisis, now it is Binance.
The world’s biggest cryptocurrency exchange seems to have exacerbated the market panic Celsius sparked. That is because of a “stuck on-chain transaction,” as Binance stated on Monday.
Temporarily halting Bitcoin withdrawals
However, in his tweet, Binance CEO Changpeng “CZ” Zhao assured the users that they were addressing the issue.
Although he first declared that the problem would be addressed in roughly 30 minutes, he followed up with a message soon after that the exchange’s resolution would take “a little longer” than the initial estimations.
Users’ money, he added, is “SAFU.”
Withdrawals eventually resumed three and a half hours after CZ’s original tweet.
Binance said it would be “still trying to process the pending Bitcoin network withdrawals” for the next hours. And also, pending network withdrawals would not go through during that time.
Users that the outage affected were to resubmit their orders once transactions resumed.
Binance has temporarily paused #Bitcoin withdrawals on the $BTC network. Meanwhile, you can still withdraw BTC on other networks.
This is due to a stuck on-chain transaction. Our team is currently working on a solution and will provide further updates soon.
— Binance (@binance) June 13, 2022
Binance’s statement after Zhao’s first tweet refers to a “batch of transactions” that were unable to go through using Bitcoin, but Zhao only mentioned a single transaction Monday morning.
Cause of stall
The transactions stalled because they were submitted to the exchange with “minimal transaction fees,” causing a backlog of Bitcoin withdrawals, according to a blog post on the company’s website.
The revelation occurred in the midst of a market crisis that saw the entire market worth of all cryptocurrencies fall below $1 trillion and Bitcoin plunge to depths not seen before 2020.
This isn’t the first time Binance has taken down its exchange or halted users’ ability to perform Bitcoin transactions.
In May, Binance halted withdrawals of Terra’s LUNA and UST due to the fall of both currencies after the decoupling of Terra’s UST stablecoin. The trade of both coins was under suspension for three days before it restarted.