Due to a massive backlog of outstanding transactions, Binance, one of the top cryptocurrency exchanges, blocked bitcoin (BTC) withdrawal on May 8 for the second time in 12 hours.
The exchange tweeted that it had temporarily suspended BTC withdrawals, and that the transactions were still processing since its fixed fees did not account for the recent increase in Bitcoin network gas costs. Binance sent an update over two hours after its original tweet, stating that it was substituting outstanding BTC withdrawal transactions with a larger fee in order for them to be picked up by mining pools.
Binance said that Bitcoin withdrawals have begun over three hours after its initial tweet, with pending transactions being processed at increased transaction fees. It also stated that it was working on facilitating withdrawals over the Lightning Network, which might help minimize future withdrawal halts.
On May 7, Binance had to temporarily prohibit Bitcoin withdrawals due to an excess of transactions on the blockchain. It restarted the withdrawals after about an hour and a half.
During the halt, the Bitcoin mempool had a backlog of over 400,000 transactions that needed to be processed, which grew to nearly 485,000 at the time of Binance’s second withdrawal suspension. A mempool is a place on the Bitcoin network where transactions “wait” before being validated by each blockchain node.
According to CryptoQuant statistics, Binance had large Bitcoin net negative withdrawals on May 7, with roughly 175,650 BTC worth around $4.95 billion leaving the exchange that day.
Binance said that the outflow data was caused by the exchange of Bitcoin between its hot and cold wallets. Bitcoin’s price has also dropped roughly 3.5% from its weekly high of almost $29,700 on May 6.
After the second halt, which occurred less than eight hours after the first, Binance has resumed bitcoin withdrawals. The second halt lasted slightly over two hours, with the Bitcoin network surpassing 500,000 unconfirmed transactions.
Binance has changed its costs in response and is working on enabling BTC Lightning Network withdrawals, which will be useful in such scenarios. Bitcoin’s price continues to fall, and it is presently at $28,240, down 2.6% in the previous 24 hours.
A few days ago Binance crashed due to the news of listing PEPE coin and Floki that led to server congestion, where Binance had to disable transactions on the aforementioned memecoins.
