Binance lifts ban on bitcoin withdrawals amid huge trading volumes

May 7 (Reuters) – Cryptocurrency trading platform Binance halted bitcoin withdrawals for several hours on Monday, citing large volumes and increased processing fees, before clearing them at a higher cost.

Late Sunday and again early Monday, the world’s largest cryptocurrency exchange shut down bitcoin withdrawals saying there was a glut of pending transactions because it did not offer alleged miners a high enough reward for recording trades on the blockchain.

The halt sent bitcoin lower though its losses were marginal, with the cryptocurrency down almost 1% to $28,162, its lowest in nearly a week.

“Our set fees did not anticipate the recent hike in (Bitcoin) network gas fees,” Binance said in a tweet. “We are replacing pending bictoin withdrawals with higher fees so that they are captured by mining pools.”

Gas fees refer to payments made to crypto miners whose computing power processes transactions on the blockchain.

“If the withdrawal amount is large, the gas fees required to process the transaction may also be significant, especially during times of high network congestion,” Joshua Chu, Group Chief Risk Officer of XBE, Coinllectibles and Marvion blockchain technology group.

“We need more information about what led to the large withdrawals.” After an hour-long pause late Sunday and several hours on Monday, Binance said withdrawals have resumed.

“To prevent a similar recurrence… our fees have been modified.” In a separate tweet, Binance denied significant inflows from the platform.

In March, Binance suspended deposits and withdrawals due to technical issues. 24-hour trading volume on Binance has reached $6.9 billion according to analytics site CoinMarketCap, more than eight times the next largest on Coinbase.

Reporting was provided by Akanksha Khushi in Bengaluru; Editing by Christian Schmollinger

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