The cryptocurrency exchange said that a “large volume of pending transactions” had forced them to temporarily restrict BTC withdrawals. On May 8, cryptocurrency exchange Binance stopped accepting Bitcoin withdrawals for a second time, citing a huge backlog of outstanding withdrawal requests.
On May 8, Binance stated that it had “temporarily” stopped allowing BTC withdrawals due to a “large volume of pending transactions.” The statement continued, saying that the transactions were still waiting because the “set fees did not anticipate the recent surge in [Bitcoin] network petrol fees.”
We've temporarily closed #BTC withdrawals due to the large volume of pending transactions.— Binance (@binance) May 8, 2023
Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
Nearly two hours after its original tweet, the exchange gave an update and stated that it was “replacing the pending [Bitcoin] withdrawal transactions with a higher fee so that they get picked up by mining pools.” Binance announced that Bitcoin withdrawals have begun over three hours after it sent its initial tweet, with pending transactions now being handled at a higher transaction charge.
It added that it was striving to make it possible to withdraw money through the Lightning Network, which it said might lessen the impact of future withdrawal freezes.
$BTC withdrawals are now resumed on #Binance.— Binance (@binance) May 8, 2023
Pending transactions are being processed by replacing them with higher transaction fees.
We'll post another update once these pending transactions are all processed.
Binance had to briefly halt Bitcoin withdrawals earlier on May 7 due to an alleged overflow of transactions on the blockchain. Over a half-hour later, withdrawals were once again permitted. Around 400,000 transactions were backed up in the Bitcoin mempool and awaiting processing. Data from mempool.space shows that at the time of Binance’s second withdrawal stop, that increased to around 485,000.
On the Bitcoin network, transactions “wait” in a mempool until each blockchain node confirms them.
According to statistics from CryptoQuant, Binance had large Bitcoin net negative outflows on May 7, with over 175,650 BTC worth around $4.95 billion leaving the exchange for the day. According to Binance, it transferred Bitcoin between its hot and cold wallets when this outflow data was recorded.
Additionally, the cost of Bitcoin has decreased by around 3.5% from its weekly peak of almost $29,700 on May 6.