Binance Suspends Ethereum and ERC-20 Token Withdrawals Before Quickly Reversing Course – Altcoins Bitcoin News

Bitcoin.com

The rollercoaster-ride in cryptocurrency prices on Monday was accompanied by Binance’s fresh restrictions for ethereum and ERC-20 tokens.

Ethereum Network Congestion Fingered as the Culprit for the Temporary Halt

Through the official Binance Twitter account, one of the world’s largest cryptocurrency exchanges by volume, announced that it had “temporarily suspended withdrawals of $ETH and ethereum-based tokens” due to network congestion while underscoring that user funds were SAFU (Secure Asset Fund for Users).

Although Binance has since reversed its earlier decision and restored service in an announcement 37 minutes after its first tweet, traders were quick to pile on with the criticism. This latest move came amid a spike in Ethereum gas costs and a backlog that quickly escalated past 151,000 pending transactions. Binance CEO Changpeng Zhao corroborated the stress on the system, noting that gas shot past “+1200” during the latest congestion.

How To Get Free Crypto  

Binance has already become a big target among the crypto community after being blamed for persistently high gas costs. Some claim that the congestion is a concerted effort on the part of Binance to attract more users to its Binance Smart Chain. However, given the tremendous transaction volumes and gas fees that Binance pays to the Ethereum network weekly, this claim is hard to corroborate

Binance Outage Underlines the Need to Scale

Yet, together with other recent events like the AWS problems that surfaced last week, this latest service outage begs the question as to whether centralized exchanges are capable of handling the latest torrent of investor flows. Moreover, the rollout of Ethereum 2.0 has brought to light similar scaling issues and whether already clogged blockchains can keep pace with advancing adoption.

For some market participants, the answer lies in liquidity aggregators. While service interruptions have dotted the cryptocurrency landscape for years and become commonplace during periods of serious volatility, aggregators that pool liquidity from centralized (CEX) and decentralized exchanges (DEX) have cobbled together a patchwork solution. Still, questions linger about the security of their custody along with blockchain interoperability.

Offerings like Orion Protocol have addressed many of these challenges by aggregating liquidity in a hybrid fashion from CEXs, DEXs, and now automated market-makers (AMMs). Aggregators are attempting to help decentralize the pressure and reverse the load issue strain felt by exchanges during peak periods while avoiding the custody question.

Coinbase Banner  

Still, for traders on centralized exchanges, load balancing issues and volatility remain a scourge for the ecosystem as the latest Binance outage underlines.

Do you think withdrawal suspensions will become the norm or a solution to network congestion will be found? Let us know in the comments section below.

Tags in this story

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer

Go to Source
Author: Reuben Jackson


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

FreeBitcoin Banner  

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.