Binance, the world’s largest cryptocurrency exchange, faced scrutiny from the crypto community as the exchange temporarily suspended Bitcoin withdrawals on its platform due to network congestion issues. This happened even as the outflow of Bitcoin continued. The withdrawals happened on May 9, 2023 and sparked concerns about the overall health of the exchange, according to a report by CNBCTV 18.
On May 8, when Binance halted Bitcoin withdrawals, a series of events began, including a large outflow of 117,359 Bitcoin and an inflow of 10,036 Bitcoin and then again an outflow of 40,184 Bitcoin, valued at nearly $4 billion.
Rumours started circulating on social media that Binance could go bankrupt, as billions of dollars were withdrawn from the exchange while Bitcoin’s price plummeted.
However, Binance later clarified that it halted Bitcoin withdrawals because of a glut of pending transactions that resulted from miners not receiving a high enough fee to log the trades on the Blockchain.
The outflows were the result of internal movements between Binance’s hot and cold wallets, necessitated by Bitcoin address adjustments, CNBCTV 18 said.
Bitcoin transaction fees also reached their highest levels in nearly two years, averaging around $9.5 per transaction, which many analysts attributed to congestion in the Bitcoin network and higher transaction fees.
While the sequence of incidents may be interconnected, experts believe that they relate to difficulties in the Bitcoin Blockchain rather than concerns at Binance. Thus, there isn’t much evidence to imply that Binance will go bankrupt anytime soon.
China To Launch National Blockchain Research Centre
China is planning to launch a National Blockchain Technology Innovation Centre in its capital city of Beijing amidst ongoing crackdown on crypto.
The centre will create a research network with local universities, think tanks and Blockchain businesses to explore core Blockchain technologies, Coin Telegraph quoted China Daily as saying.
“The fruits of this research will be used to further the digitalisation of China and expand its Blockchain industry,” the report said.
The Beijing Academy of Blockchain and Edge Computing, known for developing the Chang’an Chain Blockchain, will be leading the new institution.
Chang’an Chain blockchain is already supported by a state-owned ecosystem of 50 business corporations, including the China Construction Bank and China Unicom.
Circle Refuses To Hold Treasuries Maturing Beyond June
Circle, the issuer of the USDC Stablecoin, has refrained from holding US Treasuries maturing beyond early June due to concerns over a potential default on US government debt.
According to The Block, Circle CEO Jeremy Allaire told Politico, “We don’t want to carry exposure through a potential breach of the ability of the US government to pay its debts.”
The Circle Reserve Fund, which is managed by BlackRock, revealed that it holds no US government debt maturing beyond May 31, 2023. Other investors are also shunning Treasuries that mature after June 2023.
Circle’s USDC Stablecoin is the second-largest after Tether, with about $29 billion worth in circulation.
