Binance, the cryptocurrency exchange, experienced issues due to the volume of pending transactions, leading to a temporary pause of Bitcoin (BTC) withdrawals. The exchange explained on Twitter that large volumes of BTC withdrawal transactions were yet to be processed due to the recent surge in BTC gas fees. To resolve the issue, Binance replaced pending transactions with higher fees to enable mining pools to process them. BTC withdrawals were eventually reopened after two hours, and the exchange increased the transaction fees to prevent a similar recurrence in the future.
Binance Pauses Withdrawals and Deposits for Other Digital Assets in the Past
This is not the first time Binance has paused BTC withdrawals. It had earlier paused withdrawals on May 7 for about an hour, citing network congestion issues. There have also been instances where Binance paused withdrawals and deposits for other digital assets due to technical issues on the exchange. In December 2022, the exchange paused USDC withdrawals because the exchange was conducting a token swap involving the Circle-backed stablecoin.
The rise in Bitcoin transaction fees is a sign of a bull market, according to Binance CEO Changpeng Zhao. The fees have risen significantly in the last few months, currently around $10, compared to $1 about six months ago. As of press time, there are over 424,000 unconfirmed transactions on the network. Blockchain analytical firm Glassnode reported that the network was experiencing extremely high demand for blockspace driven by BRC-20 tokens, utilizing text-based inscriptions, and ordinals. The average fee paid per block has risen to 2.9 BTC, nearly as high as past bull peaks.
To prevent similar issues in the future, Binance has adjusted its fees and will continue to monitor on-chain activity and adjust accordingly. The exchange is also working to enable Bitcoin lightning network withdrawals for its users.