In an autopsy issued shortly after it lifted the freeze on bitcoin withdrawals, Binance identified “repairing several minor hardware failures in wallet consolidation” as the incident that ultimately forced it to pause withdrawals. To fix the issue and prevent this from happening again, Binance said he changed the logic “to only take successful UTXO from successful consolidation transactions or withdrawal transactions.”
Minor hardware failures
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 around three hours. According to a Twitter thread seeking to reassure users, the exchange claimed that user deposits were not affected. He added that users had the option to withdraw through other networks during the downtime.
In its post-mortem Of the events that forced the exchange to stop withdrawals, Binance claimed that the “repair of several minor hardware failures in the wallet consolidation nodes” on June 13 had caused “previous transactions that were pending to be transmitted to the network after the nodes were repaired.”
According to the exchange, it was these transactions, which had a low gas fee, that caused the transactions to stall. The exchange explained:
These pending consolidation transactions had a low gas fee, which caused subsequent withdrawal transactions, which pointed to the pending consolidation UTXO, to get stuck and could not be processed successfully.
Therefore, to fix this and prevent a repeat, Binance said that it had to “change the logic to only take successful UTXO from consolidation 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 leading centralized cryptocurrency exchanges, prompted an angry reaction from the CEO of peer-to-peer platform Paxful, Ray Youssef. On his June 13 cheepYoussef also took the opportunity to promote the benefits of using a P2P platform.
“While exchanges like Binance have stopped all bitcoin withdrawals, Paxful remains open. P2P is based on the honest principles of sound money, just like p2p electronic cash ala bitcoin,” said Youssef.
The Paxful CEO ends his tweet by questioning Binance’s decision to “leave all sh*tcoin withdrawals open.”
In reaction to Youssef’s tweet, a Twitter user called Crypto Journal said: “Very good just what I was telling people yesterday after CZ’s post. To be brief, Binance operates as CEFI [centralized finance] Those guys are buccaneers, they don’t care about little ones. They’re afraid that if people start withdrawing money, they can’t get together because most of the bitcoins are on loan.”
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