While some in the community have expressed concern over the temporary freeze of Bitcoin Cash (BCH) withdrawals on Binance.US, the exchange has provided some clarification. What’s happening
Binance.US tries to reassure community about Bitcoin Cash (BCH) ‘shortage’
Over the past few days, concerns have been raised about Binance.US, and its ability to guarantee its Bitcoin Cash (BCH) reserves at a one-to-one ratio. Indeed, BCH withdrawals had been temporarily paused, following a “shortage” :
omfg binance admits they don’t have enough bch to cover withdraws looool
from https://t.co/S7BwH26JqH, click BCH pic.twitter.com/t7SmZpzTOC
– imaginary_username️ (@im_uname) July 9, 2023
Faced with the questions this has generated, Binance.US customer service clarified the event last night, in order to reassure the community:
We take the security and integrity of all customer assets seriously and want to address some recent FUD regarding $BCH https://t.co/gM6e3xb9BX maintains 1:1 reserves, which means for every BCH you hold on our platform, we maintain a BCH in reserve.
The temporary pause we…
– Binance.US Customer Support (@BinanceUShelp) July 11, 2023
Firstly, the exchange said it held the quantity of BCH needed to honour its customers’ assets.
In its normal operation, funds sent to customer deposit addresses are pooled in hots wallets, before being secured in colds wallets. Everything is supposed to be done automatically, with predefined thresholds. It was this system that was affected, and which caused a malfunction :
” However, at the beginning of last weekend, transfers from our customers’ BCH repository addresses were not occurring automatically (note that this issue did not affect any other tokens). As a result, we have temporarily suspended BCH withdrawals until the fix is implemented and normal cold and hot wallet deposit flows resume. “
Although it was not specified, the rise in BCH in recent weeks may have caused an increase in activity on the platform, which could have led to the problems experienced.
In any event, withdrawals have since been fully resumed on Sunday and, as usual, the platform has called on investors not to give in to fear, uncertainty and doubt (FUD).
