The significant withdrawals of bitcoin from Binance, one of the biggest exchanges, on May 8 sparked suspicion and worry throughout the cryptocurrency world.
The majority of the bitcoin transactions, instead of being outflows to freshly formed change addresses owned by Binance, were internal transfers, therefore it appears that the initial concern was unfounded.
The effective outflows, according to Julio Moreno, head of research at CryptoQuant, were substantially less, perhaps about 10,100 bitcoin.
Moreno reported two huge transactions, worth 117,000 and 40,000 bitcoin, in a tweet that received a lot of attention. This first alarmed the cryptocurrency community.
He then explained that these weren’t user withdrawals, but rather internal Binance transactions to switch addresses. This indicates that the actual outflows from the exchange were far lower than anticipated.
Binance resumes withdrawals
After a brief halt, bitcoin withdrawals on Binance’s platform have now resumed, the company said in a flurry of tweets. The exchange said that in order to process pending transactions more quickly, it was substituting them with increased transaction fees.
Binance also disclosed intentions to modify fees to avoid such circumstances from happening again and indicated a commitment to observing on-chain behaviour and making appropriate modifications as necessary.
Binance said that its team is working on facilitating Bitcoin Lightning Network withdrawals in order to allay worries and increase withdrawal effectiveness. As the Lightning Network enables quicker and less expensive off-chain transactions, this breakthrough will assist in reducing withdrawal congestion during times of strong demand.
