FTX has announced that the cryptocurrency trading platform will suspend ETH transactions on secondary blockchains until the September update is complete.
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 be suspending ETH deposits and withdrawals and will not stop trading on the crypto exchange.
While Ethereum developers 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, cryptocurrency exchange FTX announced the suspension of Ether (ETH) transactions on secondary blockchains pending 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 through the merger.”
Official FTX tweet (left) confirming the temporary shutdown of ETH transfers. Source: Google cache.
The merge upgrade will permanently transition the Ethereum blockchain from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism aimed at reducing power consumption and introducing sharding capabilities.
According to Ethereum developers, the Fusion is designed to transition to PoS with no downtime due to Total Terminal Difficulty (TTD), which will enable the transition based on the total mining power going into building the chain. Despite the statement, FTX decided to “suspend deposits and withdrawals until the merger is complete and the networks are stable.”
Suspension of deposit and withdrawal of funds for Ethereum on different blockchains should start at different times, but may change depending on the expected complications.
FTX’s official schedule to stop 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: Merge: Top 5 misconceptions about Ethereum’s upcoming upgrade
To clear up one of the biggest misconceptions surrounding the merger, the Ethereum Foundation clarified that the upcoming upgrade will not reduce gas fees. The official explanation is:
“The payment for gas is a product of network demand versus network capacity. Merging discourages the use of Proof of Work and moves to Proof of Stake to achieve consensus, but does not significantly change any parameters that directly affect network throughput or throughput.
Instead, the update aims to completely eliminate the need for energy-intensive mining.