In an after-action report issued shortly after it unfroze bitcoin withdrawals, Binance cited “several incidents related to wallet integration repairing a small hardware failure”. To resolve this issue and prevent its recurrence, Binance said it changed its logic “to only take successful UTXO or successful withdrawal transactions from the integration transaction.”
Minor Hardware Failure
Binance said that bitcoin withdrawals on its bitcoin network have resumed just hours after a “stuck on-chain transaction” caused the exchange to freeze withdrawals for about three hours announced that bitcoin withdrawals on its bitcoin network had resumed. According to a Twitter thread attempting to reassure users, the exchange claimed that users’ deposits were not affected. It added that users had the option to withdraw via other networks during the down period.
In aafter-the-fact reportof the events that forced the exchange to suspend withdrawals, Binance said that on June 13 it “repaired some minor hardware failures in the wallet integration node” that caused “previous pending after the node was repaired . transactions were broadcast to the network.”
According to the Exchange, it was these transactions with low gas prices that caused the transactions to stop working. The Exchange explained that.
These pending consolidation transactions had low gas charges, and as a result, later withdrawal transactions that were pointing to the pending consolidation UTXO got stuck and could not be processed properly.
Therefore, to correct this and prevent a recurrence, Binance said it had to “change its logic to only take successful UTXOs from integrated transactions or successful withdrawal transactions.” After this change, withdrawals on the bitcoin network resumed, the exchange said.
Centralized Finance vs. P2P
Meanwhile, the decision to freeze withdrawals by Binance, one of the world’s top centralized cryptocurrency exchange platforms, has sparked the anger of P2P platform Paxful CEO Ray Youssef, sparked the ire of Youssef in a June 13 tweet. Youssef also took the opportunity to tout the benefits of using P2P platforms.
“While exchanges like Binance have stopped all bitcoin withdrawals, Paxful remains open; P2P, like P2P e-money like bitcoin, is built on the honest principles of sound money,” Youssef said Youssef states.
Paxful’s CEO ended his tweet by questioning Binance’s decision to “keep all sh*tcoin withdrawals open.”
In response to Youssef’s tweet, a Twitter user named Crypto Journal : “Nice one just what I was telling people yesterday after CZ’s post.” He said. The short version is that Binance is run like a CEFI (centralized finance), they are vagabonds and don’t care about the little guy. They are afraid that when people start to withdraw, they will not be able to meet, because most of the bitcoins are loans.”
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