Binance to Temporarily Suspend ETH & ERC-20 Token Withdrawals

Binance to Temporarily Suspend ETH & ERC-20 Token Withdrawals

Binance, the global cryptocurrency exchange with the maximum daily trading volume of cryptocurrencies made an announcement on temporarily halting withdrawals. The exchange will suspend withdrawals for Ethereum and ERC-20 tokens during the blockchain’s transition to its proof-of-stake (PoS) Beacon chain in September.

The move comes in as a measure to provide stability during The Merge, which is scheduled to take place in mid-September 2022. Binance is not the first exchange to make this announcement. Coinbase had announced the suspension of ETh withdrawals earlier in August, 2022. Binance is timing these suspensions with the 2 crucial upgrades that will aid Ethereum’s switch from proof-of-work (PoW) to proof-of-stake (PoS).

Binance will suspend deposits as well as withdrawals for ETH and ERC-20 tokens on Sept. 6 during the Bellatrix consensus layer upgrade andon Sept. 15, the date for which the Paris execution layer upgrade is scheduled.

The exchange has taken into account two different scenarios:

1. The possibility of a new token creation with the possibility of the Ethereum chain splitting into two separate competing chains. In that scenario Binance will use the “ETH” ticker fot the Ethereum corresponding to the PoS chain. The exchange will then credit Binance users’ accounts with the forked token from the minority chain at a 1:1 ratio. This will be based on a record of ETH balances before the Paris execution layer upgrade scheduled for Sept. 15.
2. In the other scenario, no new token shall be created and the exchange will re-open the deposits and withdrawals on priority.

The exchange has indicated that withdrawals for a potential forked token will be supported and details of distribution will be addressed in a separate announcement closer to the scheduled date.

Binance has always been known as the most reliable exchange and has earned a good reputation for its safety practices and customer relationship. This move is also planned in a way that it reduces trading risks and ensure the safety of user funds which could be at risk due to price volatility. ETH and ERC-20 spot trading will not be affected during The Merge, although it is in the best interest of the users to take risk measures during periods of price volatility in case of a situation like hard fork.

Also read – 7 Things you probably didn’t know about Vitalik Buterin & Ethereum

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