Binance Halts Bitcoin Withdrawals Second Time Within 12 Hours: Here's Why

The withdrawal suspension initially occurred on Sunday, lasting for approximately one hour.

Binance had listed several of the new memecoins created under the BRC-20 standard, most notably the PEPE token.

Binance, the leading global cryptocurrency exchange, recently made the decision to temporarily halt Bitcoin withdrawals for the second time within a span of approximately 12 hours on Monday. The reason for this action was attributed to blockchain congestion caused by a significant number of pending transactions. Binance tweeted that the suspension was due to the presence of a substantial volume of pending withdrawal transactions, a circumstance that the exchange did not foresee in light of recent surges in Bitcoin gas fees.

Gas fees, which represent the expenses borne by users for blockchain validation during each transaction, experienced a notable increase recently. This surge was a result of heightened interest in BRC-20, a new token standard that prompted the introduction of numerous memecoins this year.

There is a large volume of withdrawal transactions from Binance still pending as our set fees did not anticipate the recent surge in $BTC network gas fees.

Our team is working to accelerate the confirmation of all pending transactions.

We'll provide updates here.

— Binance (@binance) May 8, 2023

The withdrawal suspension initially occurred on Sunday, lasting for approximately one hour, during which Binance highlighted network congestion as the primary cause. In contrast, other major crypto exchanges like Coinbase and Kraken did not communicate any plans to interrupt withdrawals.

Introduced earlier this year by a coder called "Domo," BRC-20 enabled the deployment of fresh tokens on the Bitcoin blockchain. Consequently, several memecoins emerged, giving rise to a speculative trading frenzy, as individuals eagerly sought to become early buyers in this wave of tokens.

As a result of increased trading activity on the Bitcoin blockchain, gas fees reached their highest levels in almost two years. Unfortunately, this surge in activity also led traders to fall victim to numerous pump-and-dump schemes, a recurring phenomenon in the crypto market.

Notably, Binance had listed several of the new memecoins created under the BRC-20 standard, most notably the PEPE token. However, the exchange had warned users about the potential for a speculative bubble, emphasizing that these tokens lacked any practical utility.

On Monday, the broader cryptocurrency market displayed signs of weakness, with Bitcoin declining by 2.2 per cent. Similarly, Binance's native token, BNB, experienced a 1.5 per cent drop, while the second-largest cryptocurrency, Ethereum, saw a nearly 2 per cent decrease.

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