[NEWS] Binance Pauses Bitcoin Withdrawals for the Second Time in 24 Hours

[bbc.reporter]

There might be something more behind Binance's pauses on withdrawals. According to some people in social media, the exchange recently experienced the largest net outflow of bitcoin. More than 175,000 bitcoins were withdrawn. I checked this in cryptoquant.com and it appears to be true. Anyone can open a free account and confirm for yourselves.



Binance briefly paused bitcoin withdrawals for around two hours Sunday afternoon U.S. time as the number of unconfirmed transactions hit a record high.

It is not yet known when Binance will resume withdrawals after the second pause.

Read in full https://www.coindesk.com/business/2023/05/08/binance-pauses-bitcoin-withdrawals-for-the-second-time-in-24-hours/

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[adaseb]

They stated it’s because their system wasn’t set up for fees over 500sats/byte. Earlier when they halted withdraws the fees were high but not this high. They are probably recoding their withdraw system and I’ll be back up in a few hours. If you are worried just withdraw another coin such as a stablecoin.

These fees are crazy. Reminds me of the BCH and Roger Ver days of 2017 when they were spamming the network and we had to pay huge fees for a simple transaction. Hopefully this doesn’t go on for long.

[Don Pedro Dinero]

They stated it’s because their system wasn’t set up for fees over 500sats/byte.

I don't quite understand that. What they need to do from a business point of view is to raise the withdrawal fees in line with the fees that are being paid. So there shouldn't be a problem. People wouldn't even think of withdrawing much unless it's strictly necessary. In the same way that I think we now think more about spending bitcoin than we did when we could send transactions at the minimum fee and they were confirmed quickly.

[dragonvslinux]

There might be something more behind Binance's pauses on withdrawals. According to some people in social media, the exchange recently experienced the largest net outflow of bitcoin. More than 175,000 bitcoins were withdrawn. I checked this in cryptoquant.com and it appears to be true. Anyone can open a free account and confirm for yourselves.

Nice spot, wasn't aware of that. Just checked on CoinGlass and shows the same data. I assume this pause on withdraws isn't soley because high transaction fees - as I stated elsewhere, they can still offer withdrawals just with a much higher cost - but also probably moving some coins from cold storage to a hot wallet, that I imagine requires the right people in the office to make the transaction.

The main takeaway I'm getting from this situation with mempool and now Binance withdrwals is that Bitcoin is experiencing high demand while exchanges balances have now reached new multi-year lows.

FYI Withdrawals have now been resumed: https://twitter.com/binance/status/1655419622764720128

(I just checked and it's a fixed rate at 0.001 BTC ~$28)

[Kryptowerk]

There might be something more behind Binance's pauses on withdrawals. According to some people in social media, the exchange recently experienced the largest net outflow of bitcoin. More than 175,000 bitcoins were withdrawn. I checked this in cryptoquant.com and it appears to be true. Anyone can open a free account and confirm for yourselves.

Nice spot, wasn't aware of that. Just checked on CoinGlass and shows the same data. I assume this pause on withdraws isn't soley because high transaction fees - as I stated elsewhere, they can still offer withdrawals just with a much higher cost - but also probably moving some coins from cold storage to a hot wallet, that I imagine requires the right people in the office to make the transaction.

The main takeaway I'm getting from this situation with mempool and now Binance withdrwals is that Bitcoin is experiencing high demand while exchanges balances have now reached new multi-year lows.

FYI Withdrawals have now been resumed: https://twitter.com/binance/status/1655419622764720128

(I just checked and it's a fixed rate at 0.001 BTC ~$28)

Thanks for your quick reply in the other thread: https://bitcointalk.org/index.php?topic=5437787.new#new

Glad to hear it was just a short "glitch", still makes me wonder, a massive business such as binance with their own miners and nodes running - shouldn't they be able to provide a priority-line for their exchange transactions? Yes, they would miss out on some of the high-fees they could otherwise rake in if they wouldn't prioritize their own transactions. But isn't that a price you should be willing to pay to maintain a stable and reliable monopoly-exchange such as Binance?
Just a thought.

[noorman0]

-snip-
the exchange recently experienced the largest net outflow of bitcoin. More than 175,000 bitcoins were withdrawn.

It seems that users are starting to fear that the predicted increase in Bitcoin network traffic will be even worse than today. Neither Binance nor any other CEX can actually change their withdrawal rates if for some time there is no significant reduction in network activity, as it is not possible to hold customers' money during this network crisis which is not certain for how long.

[Plaguedeath]

Their current fee on Segwit Bitcoin is 0.0005BTC which is still in the range for normal priority speed.

Don't forget Binance is a centralized exchange, they're earn money through trading fee and withdrawal fee, if the mempool is still like this or become worse, I believe Binance will charge higher fee sooner or later.

shouldn't they be able to provide a priority-line for their exchange transactions? Yes, they would miss out on some of the high-fees they could otherwise rake in if they wouldn't prioritize their own transactions. But isn't that a price you should be willing to pay to maintain a stable and reliable monopoly-exchange such as Binance?

I don't think they will do that because there's no obligation for them to prioritize their customers, if someone complaint about slow transactions, they can just tell it's due to the current mempool condition. AFAIK they don't have a promotion about fast withdrawal among all centralized exchange too.

[Rikafip]

Don't forget Binance is a centralized exchange, they're earn money through trading fee and withdrawal fee, if the mempool is still like this or become worse, I believe Binance will charge higher fee sooner or later]

They already increased bitcoin withdrawal fee to 0.001, below is the screenshot I took few minutes ago and tt was expected that they will try to keep earning money on withdrawal fees and increase them. The announced LN integration should help with that as well.

[bbc.reporter]

They stated it’s because their system wasn’t set up for fees over 500sats/byte. Earlier when they halted withdraws the fees were high but not this high. They are probably recoding their withdraw system and I’ll be back up in a few hours. If you are worried just withdraw another coin such as a stablecoin.

These fees are crazy. Reminds me of the BCH and Roger Ver days of 2017 when they were spamming the network and we had to pay huge fees for a simple transaction. Hopefully this doesn’t go on for long.

They might only be using that as an excuse. The exchange had a quick outflow of 175,000 bitcoins. I speculate the real reason was really because they needed some time to replenish their hot wallet. However, I am always skeptical, so you might be correct hehehe. The important thing, they were not hacked and they are not insolvent.

[m2017]

Quite a reasonable decision from the position of binance. Like any exchanger, they have always had a fixed rate for a withdrawal fee of bitcoin (any cryptocurrency). Normally, binance made good money on every transaction, as their flat rate always exceeded the bitcoin's network current fees. Now, the rules have changed and binance doesn't want to pay extra out of pocket for users because their standard commission no longer covers the cost of the commission. I think that the pause was necessary for the management to discuss the increase in commissions and determine the price, as well as for the technical implementation of this. But why was it paused a second time? They didn't raise the price again..

If it is very necessary, then the output of other cryptocurrencies has not changed, which means that binance is operating normally (with the exception of btc).

That's interesting to know. Was it only binance that raised the commissions, or did other exchangers follow suit as well?

[Findingnemo]

Don't forget Binance is a centralized exchange, they're earn money through trading fee and withdrawal fee, if the mempool is still like this or become worse, I believe Binance will charge higher fee sooner or later]

They already increased bitcoin withdrawal fee to 0.001, below is the screenshot I took few minutes ago and tt was expected that they will try to keep earning money on withdrawal fees and increase them. The announced LN integration should help with that as well.

Generally the withdrawal fees of exchange for Bitcoin is higher and even with the current state they still can make profits because they process the withdrawals in batches so charging 25 from one user snd combine it with 25 or 50 will nowhere near even if they pay fee required for next block so this is something related to their cap fee and they will work it out soon and resume the withdrawals.

But why the hell the fee has been pushed to this much.

[Solosanz]

Generally the withdrawal fees of exchange for Bitcoin is higher and even with the current state they still can make profits because they process the withdrawals in batches so charging 25 from one user snd combine it with 25 or 50 will nowhere near even if they pay fee required for next block so this is something related to their cap fee and they will work it out soon and resume the withdrawals.

But why the hell the fee has been pushed to this much.

Because they're a centralized exchange, they can do anything that they want without hear their customers' opinion and create a voting phase.

However this is not first time where Binance use their centralized power and make people disappointed, just remember with their mandatory KYC rule when Binance were still no KYC with below 2 BTC withdrawal condition.

They can do anything and the customer is forced to follow, they will make another disappointing rule sooner or later.

[Findingnemo]

Generally the withdrawal fees of exchange for Bitcoin is higher and even with the current state they still can make profits because they process the withdrawals in batches so charging 25 from one user snd combine it with 25 or 50 will nowhere near even if they pay fee required for next block so this is something related to their cap fee and they will work it out soon and resume the withdrawals.

But why the hell the fee has been pushed to this much.

Because they're a centralized exchange, they can do anything that they want without hear their customers' opinion and create a voting phase.

However this is not first time where Binance use their centralized power and make people disappointed, just remember with their mandatory KYC rule when Binance were still no KYC with below 2 BTC withdrawal condition.

They can do anything and the customer is forced to follow, they will make another disappointing rule sooner or later.

For such kind of enforced policy change is not really from the exchange its due to the regulatory body such as governments so we can't blame the exchange for making KYC as mandatory and even Binance don't want it to be mandatory but they enforced just only because if they want to operate they have to follow the guidelines.

We can often see suspension of deposit and withdrawal on exchange for maintenance such as improving security and others but this time the sudden uncontrolled hike in the transaction fee caused them to stop it.

[tabas]

They can do anything and the customer is forced to follow, they will make another disappointing rule sooner or later.

That's why we have no hold and rules if our bitcoin's are deposited there. Fees have increased and they're not going to shoulder it for every customer that wants to withdraw in Bitcoin. These are the maintenances are for, to adjust the fees depending on the market's demand.
They're a business no matter what the situation of the network and these adjustments will be done by them. The good news is that they've integrated and allowed LN. With this, the fees aren't that much but will it cater all of our transactions if majority jumps into it?