Exchange of cryptocurrencies Binance temporarily blocked bitcoin withdrawals on Monday, claiming high volumes and an increase in processing costs, before clearing them at a higher cost.
The world’s largest crypto exchange stopped down bitcoin withdrawals late Sunday and again early Monday, citing a surplus of outstanding transactions as a result of not paying so-called miners a high enough payment to track the deals on the blockchain.
The pause sent bitcoin lower, if little, with the cryptocurrency last down roughly 1% to $28,162, its lowest in nearly a week.
“Our set fees did not anticipate the recent surge in (bitcoin) network gas fees,” Binance tweeted. “We’re replacing pending bictoin withdrawal transactions with a higher fee so that they get picked up by mining pools.”
Gas fees are payments made to cryptocurrency miners whose processing power is used to execute transactions on the blockchain.
“If the withdrawal amount is large, the gas fee required to process the transaction may also be large, especially during times of high network congestion,” says Joshua Chu, group chief risk officer of blockchain technology group XBE, Coinllectibles, and Marvion.
“We need more information on what has led to the large withdrawals.” Binance said withdrawals resumed after an hour-long halt late on Sunday and for many hours on Monday.
“Our fees have been adjusted to avoid a similar recurrence.” Binance denied substantial outflows from the platform in a separate tweet.
Binance banned deposits and withdrawals in March, citing technical difficulties. According to the analytics site CoinMarketCap, the 24-hour trading volume on Binance was $6.9 billion, more than eight times the next-largest venue, Coinbase.
