Binance, the biggest cryptocurrency exchange in the world, temporarily halted Bitcoin withdrawals for the second time in 12 hours on Monday, citing network congestion due to a large backlog of transactions. Binance explained via Twitter that they did not anticipate the recent increase in Bitcoin gas fees, which are paid by users to blockchain validators every time they transact on the network. The rise in gas fees was due to the increased interest in a new token standard called BRC-20, which has resulted in the launch of several new meme coins this year.
On Sunday, Binance had also suspended withdrawals for an hour due to the network’s congestion. However, other major crypto exchanges like Coinbase and Kraken have not announced any withdrawal pauses. The increased trading activity on the Bitcoin blockchain due to the BRC-20 standard has pushed gas fees to near two-year highs, leading to traders falling prey to several new pump-and-dump schemes, which are recurring incidents in crypto markets. Binance had also cautioned users of the potential speculative bubble with these new meme-coins, stating that they have no real utility. The broader crypto market, including Bitcoin, Binance’s native token BNB, and world number two cryptocurrency Ethereum, weakened on Monday, with each of them falling in value.
