Cryptocurrency exchange Binance briefly suspended withdrawals of Ether (ETH) and ERC-20 tokens for over 30 minutes yesterday
Leading cryptocurrency exchange Binance temporarily halted withdrawals of ETH and ERC-20 tokens for more than half an hour yesterday. The company announced the pause via its official Twitter account, citing heavy network congestion as the cause.
Binance tweeted: “Binance has temporarily suspended withdrawals of $ETH and Ethereum-based tokens due to high network congestion.” The exchange reassured users that their funds were safe and apologized for any inconvenience caused by the temporary suspension.
Ether is one of the world’s most used cryptocurrencies. ETH recently surpassed the $2,000 mark for the first time as increasing user activity has put additional strain on the Ethereum network. The congestion was likely driven in part by extensive use of ETH across decentralized finance (DeFi) platforms.
Binance later resumed withdrawal services for ETH and ERC-20 tokens, allowing users to withdraw these assets from the platform again. Despite the restoration of service, the suspension drew criticism from traders and investors who were unhappy with the interruption.
Binance CEO Changpeng Zhao commented on the situation, tweeting: “ETH is super congested now, with gas over 1200. @Binance suspended withdrawals. There was a conspiracy theory that Binance was deliberately raising ETH gas fees. Let’s see them come down a bit.”
The move came amid a surge in Ethereum gas fees and a transaction backlog that at one point exceeded 151,000 pending transactions on the Ethereum blockchain. Some users criticized Binance, suggesting the pause was intended to drive traffic to Binance’s own Binance Smart Chain.
High Ethereum fees are increasingly a problem for the network. Crypto commentator Lark Davis recently urged Ethereum developers to accelerate the rollout of ETH 2.0, warning that failure to address scaling and fee issues could allow competing networks to overtake Ethereum.
Steep gas prices make the network less accessible for average investors and push users toward lower-cost alternatives. Davis noted that Binance Smart Chain has gained popularity as a result of high Ethereum gas fees and observed that some decentralized applications (dApps) on Binance Smart Chain are seeing usage volumes approaching those of dApps on Ethereum.