Binance Shifts $4.4 Billion in Bitcoin as Crypto Exchange Temporarily Pauses BTC Withdrawals – What’s Going On?
Binance has moved a large stash of Bitcoin between its crypto wallets over the weekend as the platform halted BTC withdrawals citing network congestion.
According to an analysis of on-chain data by CryptoQuant’s Head of Research Julio Moreno, Binance moved about $4.4 billion worth of BTC across its digital-asset wallets on Sunday in two tranches of 117,000 and 40,000 coins.
“In reality, these are bitcoin sent to newly created change addresses that belong to Binance,” Moreno noted.
A lot of people commenting about the huge Bitcoin outflows from Binance today.
— Julio Moreno (@jjcmoreno) May 7, 2023
Two transactions of 117K and 40K Bitcoin respectively.
In reality, these are bitcoin sent to newly created change addresses that belong to Binance.
Effective outflows are most likely just 10,100… pic.twitter.com/c5z8WOshG6
Addressing the move, Binance said in an early Monday tweet that Bitcoin was moved “between Binance hot and cold wallets due to the BTC address adjustments.”
A cold wallet is a type of cryptocurrency wallet that securely stores your private crypto keys offline, usually on a physical device.
Compared to hot wallets, cold wallets offer more security benefits because they are less possible to hack and are therefore less vulnerable to loss of digital assets.
Binance Halts BTC Withdrawals Citing Network Congestion
Binance also temporarily halted Bitcoin withdrawals twice over the weekend, blaming congestion on the Bitcoin blockchain.
More specifically, the world’s largest cryptocurrency exchange halted Bitcoin withdrawals for several hours late on Sunday and again early on Monday.
The platform said the issue was due to a glut of pending transactions that were not added to the Bitcoin blockchain because of their low gas fees.
“Our set fees did not anticipate the recent surge in (bitcoin) network gas fees,” Binance said in a tweet.
“We’re replacing the pending bictoin withdrawal transactions with a higher fee so that they get picked up by mining pools.”
Nevertheless, the exchange has recently resumed Bitcoin withdrawals once again.
“To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed,” Binance said in a tweet.
“Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.”
As of now, the number of unconfirmed transactions still stands above 400,000, which is near record levels.
The surge in fees can be partly attributed to the increasing adoption of Ordinal inscriptions, which are the equivalent of NFTs minted on the Bitcoin network.
Notably, Bitcoin recorded a new all-time high for the number of daily transactions last week in the wake of JPMorgan Chase’s acquisition of First Republic.
According to data from crypto statistics platform BitInfoCharts, the daily number of Bitcoin transactions surged beyond 568,300 on April 30, nearly 78,000 more than its previous peak during the top of the 2017 bull run.
Binance’s 24-hours trading volume has reached over $7.6 billion, according to analytics site CoinMarketCap, more than eight times the next-largest crypto exchange, Coinbase.
Meanwhile, the flagship cryptocurrency is currently trading at $27,913.64, down by 3.4% over the past 24 hours.
