Binance assures users after 3rd-party glitch briefly halted withdrawals

The exchange cited technical issues as the reasons for halting withdrawals across multiple networks earlier this morning.

Cryptocurrency exchange Binance announced a temporary freeze on withdrawals on Wednesday morning. The suspension took place across multiple networks as a result of a technical issue by a third-party provider, according to Binance. 

In a tweet, the exchange said the incident took place around 7:00 am UTC and was resolved by the team within an hour.

Earlier today, around 07:00am UTC, #Binance temporarily closed withdrawals for multiple networks due to an issue with a third-party technical provider.

Our team responded quickly, resolving the issue within 1-hour.

Funds are SAFU. Thank you for your patience and understanding.

— Binance (@binance) August 17, 2022

Binance also assured users that despite the freeze, funds are “SAFU.” This acronym stands for the exchange’s monetary fund, Secure Asset Fund for Users (SAFU). The fund was created in 2018 by Binance to compensate customers in light of a hack on the exchange. It holds 10% of all trading fees.

After questions about the fund from Twitter users, the exchange promptly clarified the purpose and its $1 billion value.

Here’s everything you need to know about SAFU. https://t.co/umGZ0xv1rl pic.twitter.com/cq3TCPVBfm

— Binance (@binance) August 17, 2022

This comes only days after Binance recovered and froze nearly $450,000 worth of the stolen assets from the Curve Finance hack. In June, Binance also halted Bitcoin (BTC) withdrawals due to major network congestion. Binance is the world’s largest crypto exchange and deals with nearly 3.224 million transactions per day. 

Volatile market conditions have caused major turbulence for crypto companies. The crypto exchange Celsius also halted withdrawals in June, though it cited market instability. Shortly after it declared bankruptcy. 

As a forewarning, Coinbase announced it will halt deposits and withdrawals of Ethereum (ETH) and ERC-20 tokens during the upcoming Ethereum Merge, scheduled to take place this September. 

Related: The worst places to keep your crypto wallet seed phrase

Market volatility has caused some hodlers to reexamine where they store their digital goods. Many are turning to hardware wallets as the answer. One Twitter user responded to Wednesda’s Binance freeze with:

ANOTHER NEAR MISS…
“Funds are SAFU” ….
Until they are not
…
… how many warnings do people need?
…
NOT YOUR KEYS NOT YOUR COINS

— HEX Ⓜ️achine Not in it for the tech. soz (@HexMachineV2b) August 17, 2022

According to a July report, the global hardware wallet market should outpace the global exchange market. It has an anticipated value of $1.1 billion by the year 2027, whereas the exchange market should reach a value of $675 million by 2028.