Binance, the leading cryptocurrency exchange, recently announced that it was working on integrating Lightning Network, an bitcoin-based scaling system, into its platform. The announcement was made after the exchange had to pause bitcoin withdraws twice within a day due to congestion on the network.
Binance’s congestion problem was caused by the growth BRC-20 tokens. These tokens are issued over the Bitcoin blockchain and have overwhelmed the BTC memory pool, with more than 450,000 pending transactions with fees of $13 at the time this article was written, according to blockchain information.
When there is congestion, users can choose to withdraw from the Lightning Network and avoid the high fees charged by the BTC networks.
Binance has announced it will not only begin to implement this solution, but also adjust its withdrawal fees in order to avoid this problem in the future. It will continue to monitor and adjust fees as necessary.
Binance also stated.
We’re taking this as a lesson and will do everything we can to avoid it happening again.
Reporting BTC outflow rumors
The exchange stopped Bitcoin withdrawals on May 7 for the first. It stated that there was “a congestion problem” and that Binance was “currently working on fixing the issue until the network has stabilized.” Binance also promised to reopen the withdrawals as quickly as possible.
halted bitcoin withdrawals again shortly after due to the “large volume of pending transaction” that the exchange had. This led to the dissemination of messages about large outflows from directions associated with Binance. Changpeng “CZ” Zhao, CEO at Binance, dismissed the reports on social media as FUD.
Binance clarified the outflows are ‘actually movements from Binance cold to hot wallets as a result of the BTC addresses adjustments’. The reports incorrectly identified the wallets belonging to Binance exchanges.