Binance, the world’s largest cryptocurrency exchange, has temporarily suspended withdrawals to the Solana network due to an “increased volume of transactions.”
According to a Binance announcement released on March 6, the exchange expects to implement a solution and resume withdrawals starting on March 9.
Binance Temporarily Halts Solana (SOL) Withdrawals
According to the press release on March 6, Binance announced that,
“Withdrawals on the Solana (SOL) network have been intermittently suspended since 2024-03-04 due to the increased volume of transactions on the network.”
The exchange stated that it has identified “some areas for optimization” and is working on rectifying the situation, with a scheduled implementation of a “long-term solution” on March 9 at 18:00 (UTC).
Solana’s status page indicated that the last time the network faced difficulties was on February 6, during a five-hour outage. However, Solana has not made any public statements regarding network stability in response to Binance’s decision to suspend withdrawals. It remains unclear if Binance’s move is directly related to the network’s stability.
Coinciding with Binance’s decision, Solana’s SOL token experienced a surge in daily trading volume, reaching $9.5 billion, reminiscent of figures last seen in September 2021 when SOL was trading at $209.
Meanwhile, Solana’s native SOL token experienced a slight decline of 3.8% in the 24 hours leading up to 10:40 am UTC, trading at $127.81. However, the token saw a significant increase of over 14.5% on the weekly chart at the time of writing.
Binance and Other Exchanges Struggle with Performance Amidst Surging Crypto Trading Activity
Binance’s notice of increased trading volumes comes shortly after Bitcoin reached a new all-time high above $69,200 on March 5. Additionally, Bitcoin briefly surpassed the market cap of silver, becoming the world’s eighth-largest asset.
Binance is not the only exchange facing performance issues amid increased cryptocurrency trading activity. Last week, major exchanges like Coinbase, Kraken, and Bybit faced performance issues.
Earlier this week, Coinbase users reported irregular activities, as some were experiencing issues such as displaying a $0 account balance. However, Coinbase assured users of ongoing improvements in customer trading, although some may still experience errors in login, sends, receives, and payment methods due to increased traffic.
Ivo Crnkovic-Rubsamen, the chief strategy officer and technical lead for trading at the dYdX exchange, attributed the increase to a surge in retail interest combined with increasing workloads from algorithmic trading firms.
He explained that the rapid price movements led trading firms to significantly increase the rate of order placements and cancellations, resulting in heightened demand on the exchanges’ matching engines.
He said,
“Because there’s so much retail interest and the price action is moving so fast, all of the algorithmic trading firms are vastly increasing the rate of order placements and cancels they want to send to the matching engine to maintain their positions […] It’s common for a trading firm to cancel 20 times the output of orders at a hectic time.”
Despite the recent performance issues, Binance received the Cyber Security Professional Merit Award under the banking and finance category from Hong Kong authorities in 2024, making it the only Web3 firm to receive such recognition.
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