After the Ethereum Foundation confirmed that the Bellatrix upgrade (which will initiate the Merge process) will take effect on September 6, crypto exchanges such as Binance are taking measures to mitigate the risks that the upgrade will bring. One of them is the suspension of ETH and ERC-20 token deposits and withdrawals.
Deposits and withdrawals will be suspended on two occasions: during the Bellatrix consensus layer upgrade and the Paris execution layer upgrade. Both upgrades are expected to occur at 11 a.m. (UTC) on September 6 and 12 a.m. (UTC) on September 15.
Binance wants to make sure that the switch to Ethereum’s proof of stake (POS) chain goes smoothly next month. According to the most recent announcement, it is taking steps to “reduce trading risks caused by price volatility and to ensure the safety of user funds during the hard fork.”
Aside from this update, the exchange outlined a possible scenario in which Ethereum splits into two competing chains, resulting in the creation of a new token. Binance would use the “ETH” ticker to represent the planned Proof-of-Stake Ethereum in such a case.
It will credit users’ accounts at a 1:1 ratio with the forked token. The distribution will be determined by the snapshot taken before the Paris execution layer.
“Withdrawals for the forked token will be supported.”
Otherwise, if the Ethereum Merge does not result in the creation of any new tokens, Binance will resume normal deposits and withdrawals following the Merge.
Binance will continue to offer spot and margin trading as usual. However, between the 14th and 16th of September, it will suspend ETH cross and isolated margin borrowing.
Other exchanges, such as Coinbase, have been preparing for the upcoming Ethereum Merge by launching ‘Coinbase Wrapped Staked ETH (cbETH)’.