Bitcoin Resumes Bitcoin Withdrawals After Brief Suspension

Bitcoin Resumes Bitcoin Withdrawals After Brief Suspension by Adam Rosen last updated on May 21, 2023

Binance (cryptocurrency exchange) halted the withdrawals of Bitcoin on its platform on Monday. As per the sources, the withdrawals remained suspended for multiple hours amid heavy volume and a rise in the processing fees.

Eventually, the withdrawals were cleared after the hiatus, but at a much higher cost than what's normal! On the Binance end, the problem was due to a build-up of pending transactions.

Not Enough Mining Reward

Experts believe that the whole issue could be boiled down to not offering enough rewards to the miners. This means that the miners were not interested in processing the transactions on the blockchain since the reward was not enough.

This halt by Binance sent the Bitcoin marginally lower, but it was only for a brief period of time. Overall, Bitcoin lost 1% of its value and was last seen near the $28,162 level.

According to Binance, they had a set fee for processing Bitcoin transactions. However, the fee set by them didn't account for the recent increase in the network gas fees.

To solve the issue, Binance had to set a higher fee for the pending Bitcoin transactions. Doing so will increase the chances of them being picked by the BTC mining pools.

According to a blockchain expert, a higher amount of BTC withdrawal requires a higher amount of processing fee as well. In addition, periods of network congestion may require an even higher fee!

The crypto exchange also announced that it would investigate why a sudden influx of large withdrawals occurred on its platform.

Binance also made it clear that it has adjusted its fee structure to prevent a similar incident from occurring again.

During March, Binance suspended all deposits and withdrawals on its platform. At that time, the exchange cited tech issues as the reason for the suspension.

For the most part, it appears more like a human error rather than something serious that can effect the integrity of the Binance platform.