Binance faced the challenge of withdrawing Ether (ETH) and all ERC-20 assets on Friday, as users could not access any of their Ethereum-based assets for nearly an hour. The break came abruptly when the stock exchange’s Twitter account told users that Binance had “temporarily suspended the withdrawal of ETH and Ethereum-based tokens to solve the congestion problem.”
“Money is SAFU,” Binance was assured, but gave no further details. After about an hour, it seemed that the withdrawal had been restored, but the stock exchange did not try to find out what made it close such an important part of the infrastructure.
The somewhat ambiguous search for “congestion problems” seems to indicate that rising petrol prices at Ethereum have something to do with this break. The community has expressed doubts about such an explanation with Red, the middleman in the Harvest Finance community who has linked the emergence of Binance Smart Chain:
“The congestion of ETH today is not worse than in previous weeks, so the timing of the Binances section can be considered dubious as they struggle with the exchange of ideas with the BSC Ethereum chain.”
In fact, the data show that Friday was by no means exceptional in terms of blockchain congestion. DuneAnalytics’ dashboard by Alex Kroeger shows that prices were in line with the two previous days.
According to Etherscan data, average petrol prices are now lower than they were at the beginning of February, which makes today’s Binance data even more confusing. In any case, congestion in itself should not be a major exchange problem.
These circumstances raised suspicions about Binance’s true motives, as the renowned analyst Hasu suggested that he “declared war on Ethereum.” Although the comment was posted before the review resumed, society as a whole is still confused about what exactly happened.
A technical problem may be an appropriate explanation. Sam Bankman-Fried, CEO of FTX, noted that the Amazon Web Services group, which hosts both Binance and FTX, has been disrupted, resulting in platform issues. Bankman-Fried responds to reports of denial-of-service attacks.
A Binance spokesman contacted by Cointelegraph was reluctant to provide further details, although they said it was a “normal problem.”
Ironically, the price of Binance Coin (BNB) rose from $ 260 to a short-term peak of $ 350 immediately after the break. Ether fell slightly from $ 1930 to $ 1916 during this time period, which would be normal market volatility.
Many attribute the growth of BNB to the increasing use of Binance Smart Chain, which now has twice as many daily Ethereum transactions. It seems that the stock exchange will have no reason to disrupt the Ethereum blockchain effectively, but the lack of a clear connection continues to speculate. Patrick Maguire, CEO of Pocket Network, a provider of node infrastructures, commented on the overall significance of the event:
Whether it’s just routine maintenance or intentional scheduled maintenance, the fact that any exchange can determine when someone can use tokens with little or no warning is contrary to the spirit of decentralization.