Binance temporarily halts Bitcoin withdrawals

The cryptocurrency platform is experiencing a 'congestion' issue, company says

Binance's team is working on a fix to stabilise the platform, the company said.

Binance, the world's biggest cryptocurrency exchange by trading volume, has temporarily closed Bitcoin withdrawals because its network is suffering a “congestion” issue, the company said in a tweet on Sunday.

“Our team is currently working on a fix until the network is stabilised and will reopen $BTC withdrawals as soon as possible”, the tweet said.

“Rest assured, funds are SAFU.”

We've temporarily closed $BTC withdrawals as the #Bitcoin network is experiencing a congestion issue.

Our team is currently working on a fix until the network is stabilized and will reopen $BTC withdrawals as soon as possible.

Rest assured, funds are SAFU.

— Binance (@binance) May 7, 2023

SAFU refers to Binance's Secure Asset Fund for Users, an emergency fund the platform set up in July 2018 to protect users' investments. While the fund fluctuates based on the market, it is valued at about $1 billion, according to the Binance website.

The term also means “safe” in the cryptocurrency world.

However, shortly before 9pm UAE time on Sunday, Binance said the issue had been resolved in a follow-up tweet.

"$BTC withdrawals are now resumed on #Binance. Thank you for your patience and we apologise for any inconvenience," the company said on Twitter.

It is not the first time that Binance has temporarily halted Bitcoin withdrawals. In June last year, Binance founder and chief executive Changpeng Zhou tweeted that the platform had temporarily “paused Bitcoin withdrawals due to a stuck transaction causing a backlog”.

“Should be fixed in ~30 minutes. Will update. Funds are SAFU.” Mr Zhou added.

It has been a tumultuous 12 months for the global cryptocurrency sector, which is only now emerging from a “crypto winter” after the collapse of a number of large platforms including Celsius, Three Arrows Capital and Sam Bankman-Fried's FTX, which filed for bankruptcy in the US on November 11.

The collapse of FTX, once valued at $32 billion, is the highest-profile cryptocurrency exchange failure to date, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal, Reuters reported at the time.

Bitcoin is currently up 1.12 per cent at $28,981.48 as of 7.50pm UAE time on Sunday.

Last month, Bitcoin climbed above the key $30,000 mark for the first time since June 2022, but is still down more than 50 per cent from its record high of more than $68,000 in November 2021.

In February, Binance admitted that it had “gaps” in its compliance with US regulations and said the company was likely to pay a fine to settle investigations.

The gaps, however, had been closed and the company co-ordinated with US authorities to iron out any issues, Bloomberg reported at the time, quoting Binance's chief strategy officer Patrick Hillmann.

Updated: May 07, 2023, 5:04 PM