In a post-mortem issued shortly after it lifted the freeze on bitcoin withdrawals, Binance has identified the “repairing of several minor hardware failures on wallet consolidation” as the incident that ultimately forced it to pause withdrawals. To fix the problem and to stop this from recurring, Binance said it changed the logic “to only take successful UTXO from consolidation transactions or successful withdrawal transactions.”
Binance has said bitcoin withdrawals on its Bitcoin network have resumed just hours after “a stuck on-chain transaction” forced the exchange to freeze withdrawals for about three hours. According to a Twitter thread in which it seeks to reassure users, the exchange claimed that users’ deposits were unaffected. It added that users had an option to withdraw via other networks during the down period.
According to the exchange, it was these transactions, which had a low gas fee, that led to transactions getting stuck. The exchange explained:
These pending consolidation transactions had a low gas fee, which resulted in the later withdrawal transactions – which were pointing to the pending consolidation UTXO – getting stuck and not able to be processed successfully.
Therefore, to fix this and prevent this from recurring, Binance said it had to “change the logic to only take successful UTXO from consolidation transactions or successful withdrawal transactions.” Following this change, withdrawals on the bitcoin network have resumed, the exchange said.
“While exchanges like Binance have stopped all bitcoin withdrawals Paxful remains open. P2P is built on the honest principles of sound money just like p2p electronic cash ala bitcoin,” Youssef said.
The Paxful CEO ends his tweet by questioning Binance’s decision to “leave all sh*tcoin withdrawals open.”
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