Binance suspends then resumes Bitcoin withdrawals in two hours: Theories and market impact


  • Binance exchange temporarily closed Bitcoin withdrawals on May 7, citing BTC network congestion.
  • The clogging caused delays with many transactions pending, and the fees soared.
  • The exchange assured users of the safety of funds before resuming two hours later.
  • OKX exchange leveraged the incident, and the meme trend continues with a significant drop in PEPE. 

Binance, the largest exchange by trading volume, announced that they had paused Bitcoin (BTC) withdrawals on Sunday, May 7, 2023, at 6:07 PM EAT, citing congestion issues on the Bitcoin network.

Also Read: What the recent meme coin pump means for Bitcoin and Ethereum

Binance Bitcoin network congestion incident on May 7

Based on the details of the announcement, the exchange paused Bitcoin withdrawals because of issues on the BTC network, saying that they were experiencing congestion. Nevertheless, the exchange, led by CEO Changpeng Zhao (CZ), assured that the team worked to fix the problem until the network stabilized. They also reassured the community that the funds were SAFU and the withdrawals would be re-opened immediately.

Notably, this is not the first time Binance has complained about network congestion on the Bitcoin network and halted withdrawals. In June 2022, CZ tweeted that the platform had temporarily "paused Bitcoin withdrawals due to a stuck transaction causing a backlog."

OKX exchange uses the downtime to its advantage

While Binance suspended BTC withdrawals, OKX exchange seized the opportunity to market itself, noting that deposit and withdrawal services on the exchange were fine.

Based on the post, the exchange acknowledged high transaction fees, calling users' attention to the lightning network for more affordable rates.

The incident caught the attention of the head of Firmwide Research at Galaxy Digital New York, Alex Thorne, who congratulated the OKX exchange while calling attention to the high-fee environment on the Bitcoin network. In his opinion, it is time for more engineering.

Some users have attributed the issue to a regulatory premonition or that the suspension was deliberate as the exchange tried to manoeuvre around a small profit margin because of the high transaction fees. On this note, the user said that Binance may have closed and gated re-opened withdrawals when the fees were lower. Either way, the user calls the move a "disingenuous and suspicious excuse.

Crypto market updates

At the time of writing, Bitcoin (BTC) price is $28,943, down 0.3% in the last hour but up 0.38% in the last day. The global crypto market cap stood at $1.19 trillion, a 0.55% increase over the last 24 hours. Still, meme coins continued trending, with Dogecoin (DOGE) price recording a 0.2% increase daily. On the downside, Pepe (PEPE) coin has plunged a staggering 5.07% decline in the last 24 hours.

Also Read: Speculation of a possible incoming PEPE crash, here's why


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Polygon joins forces with WSPN to expand stablecoin adoption

Polygon joins forces with WSPN to expand stablecoin adoption

WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.

More Cryptocurrencies News
Coinbase envisages listing of more meme coins amid regulatory optimism

Coinbase envisages listing of more meme coins amid regulatory optimism

Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.

More Crypto News
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP