Binance Restricts Fresh Withdrawals of Ethereum and ERC-20 tokens

Binance announces fresh constraints on Ethereum and ERC-20 tokens
  • Binance recently announced that it is suspending the $ETH and ethereum-based tokens withdrawals temporarily
  • The traders were quick to jump in with their due opinions, mostly criticism
  • The crypto network is already blaming Binance for steadily high gas costs

Binance is a cryptocurrency trading platform that offers a network for exchanging several cryptocurrencies. Binance, in terms of trading volume, holds the record of being the most major cryptocurrency trading platform in the world. The network supports the majority of the mainstream cryptocurrencies. It facilitates its traders with a crypto wallet’s service, where they can reserve their electronic investments.

Withdrawals Suspended Due To Ethereum Network Congestion

Source: Twitter

Binance recently announced that it is suspending the activities related to $ETH and ethereum-based tokens temporarily through its official Twitter profile. The platform claims that they decided due to congestion in network congestion while emphasizing that trader funds were SAFU (Secure Asset Fund for Users).

Source: Twitter
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Binance then peddled back its previous decision and put back the services in a statement 37 minutes after its first tweet. However, the investors were quick to put forward their opinions, mostly criticism. This current move arrived amid a surge in Ethereum gas prices and an excess that quickly soared past 151,000 pending payments. Binance CEO, Changpeng Zhao, validated the system’s pressure, highlighting that gas prices escalated past +1200 during the recent congestion.

The crypto network is already blaming Binance for steadily high gas costs. The platform is now a firm target of the crypto community. There are observations that the congestion is a coordinated attempt of Binance to gain more customers for its Binance Smart Chain. However, the claim is hard to believe because the volume of transactions is enormous, and so are the weekly gas charges that Binance pays to the Ethereum network.

Binance Disruption Highlights The Prevailing Scaling Issues

In collaboration with other current episodes, such as the AWS issues that emerged last week, this latest facility outage puts the industry in a difficult spot. The question remains whether these centralized exchanges can manage the latest rush of investor flows. Besides, Ethereum 2.0 highlights similar scaling problems and doubts if already blocked blockchains can keep stride with developing adoption.

For some market members, the answer resides in liquidity aggregators. The aggregators that source liquidity from centralized and decentralized exchanges are cobbling together for a patchwork solution. Still, questions surface about the safety of their charge along with blockchain compatibility.

With the origin of the latest Binance outage, the doubtful perception of investors sustains itself. Thus, for investors on centralized trading platforms, load balancing problems and uncertainty represent a curse for the ecosystem.

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Steve Anderrson
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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