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Binance, the largest crypto exchange, temporarily paused withdrawals of Bitcoin for the second time in less than 12 hours, citing congestion on the token’s network. The digital asset extended a retreat.
The step was taken due to the “large volume of pending transactions” and “our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible,” Binance said on Twitter on Monday in Asia.
Just after 11 a.m. Singapore time the company tweeted that it aimed to reopen withdrawals in the next hour by paying a higher fee so pending transactions get picked up by Bitcoin miners, the computer rigs that operate the network.
Binance on Sunday halted Bitcoin withdrawals for about 90 minutes, blaming congestion on the token’s blockchain. Data from CryptoQuant showed the platform saw its highest ever net daily outflow of Bitcoin — a net 175,646 tokens — on May 7.
Bitcoin, the biggest cryptocurrency by market value, fell as much as 3% and was trading at about $28,070 as of 11:45 a.m. in Singapore. An index of the biggest 100 digital assets posted a similar decline.
Binance is by far the largest exchange in the digital-asset sector following the collapse of rival FTX last year. Volumes on the platform exceeded $6 billion in the past 24 hours, five times as much as the next nearest platform OKX, according to data from CoinGecko.
Earlier this year Bitcoin developer Casey Rodarmor released a protocol — called Ordinals — that helped people mint nonfungible tokens on the network for the first time. That boosted transactions on the Bitcoin blockchain.
Last year’s crypto crash and bankruptcies like FTX undermined confidence in digital-asset platforms and skepticism continues to linger over the industry.
At the moment, the withdrawal fees charged by exchanges aren’t sufficient to cover the fees charged by miners, said Stefan von Haenisch, head of sales trading at OSL SG Pte in Singapore.
“The queue of transactions pending verification for inclusion in the blockchain has experienced significant growth in recent days, causing an increase in transaction fees and confirmation times,” he said.