FTX has announced that the cryptocurrency trading platform will suspend ETH transactions on secondary blockchains until the September update is completed.
Disclaimer: FTX removed the original tweet and updated the blog post that formed the basis of the original story. This article has been updated based on new official information to confirm that FTX will suspend ETH deposits and withdrawals and will not stop trading on the crypto exchange.
While the developers of Ethereum have promised no downtime during the merger, one of Ethereum’s most anticipated upgrades, members of the crypto community have decided to take proactive measures to ensure the safety of investor funds. In this regard, the FTX crypto exchange announced that it will suspend ether (ETH) transactions on secondary blockchains until the completion of the September update.
Shortly after the announcement, FTX deleted the tweet, with CEO Sam Bankman-Fried clarifying that “ETH trading will continue after the merger.”
Official FTX tweet (left) confirming the temporary deactivation of ETH transfers. Source: Google cache.
The merge upgrade will permanently transition the Ethereum blockchain from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism in order to reduce power consumption and introduce sharding capabilities.
According to the developers of Ethereum, the merger is intended to transition to PoS without downtime due to total terminal difficulty (TTD), which will enable the transition based on the total mining power that goes into building the chain. Despite this announcement, FTX has decided to “suspend deposits and withdrawals until the merger is completed and the networks are stable.”
The suspension of Ethereum deposits and withdrawals on different blockchains is scheduled for different times, but may change due to expected complications.
Official FTX deadlines for ending ETH deposits and withdrawals. Source: FTX
FTX also noted that the cryptocurrency exchange is not liable for any losses in the event of significant price fluctuations, adding that “you are responsible for understanding the implications of this announcement.”
See also: The Merge: Top 5 misconceptions about Ethereum’s pending upgrade
To dispel one of the biggest misconceptions surrounding The Merge, the Ethereum Foundation clarified that the upcoming upgrade will not lower gas fees. Official explanation:
“Gas tariffs are a product of network demand in relation to network capacity. The merge forgoes proof-of-work and switches to proof-of-stake to reach consensus, but does not significantly change parameters that directly affect throughput or network throughput.”
Instead, the update aims to eliminate the need for energy-intensive mining.