Binance faces turbulence with BNB’s crash and massive withdrawals, underscoring the relevance of cold wallets in crypto security.
The current cryptocurrency market landscape shows signs of instability, especially with regards to Binance’s BNB token. BNB is currently trading at a yearly low of $208, seeing a 3.2% drop in the last 24 hours.
This downward trend has continued for the last week with a 13% plunge and, over the course of the last year, it has fallen by 30%. Despite these numbers, BNB maintains its position at 4th in the global CoinMarketCap ranking.
Massive Bitcoin’s Withdrawal on Binance
A recent post on X by @healthy_pockets highlights how the BNB crash has triggered a massive Bitcoin’s withdrawal on Binance. Withdrawals are reported to have skyrocketed following BNB’s plunge below $212, with mention of the possible liquidation of the exchange’s 160 million collateral. As a result, around 4,600 Bitcoin have been withdrawn from Binance in a single day.
Limitations on Withdrawals and Deposits in Europe
On the other hand, a post by @CoinTelegraph reports that Binance is alleged to have limited withdrawals and deposits in Europe, citing problems with payment processors. This situation could be related to the current jitters and lack of users’ confidence in the platform.
The crypto exchange stated in a post on X that it does not have a specific timeline for restoring SEPA transfers and that its payment provider “can no longer support these transactions.”
The crypto exchange added that “we understand the inconvenience this has caused and are actively working to resolve this as soon as possible.”
The statement was issued in response to an alleged European Binance user who claimed to have bought a “large amount of EUR on Binance” a few days ago. Due to the suspension of his Paysafe account, the alleged client was unable to withdraw euros to his bank account or sell them on the cryptocurrency exchange. Binance Customer Support further stated the following:
“According to customer support, there is nothing you can do about it, except wait for Binance to find a new payment provider. Allowing users to buy EUR, only to immediately block them from accessing it, is what I would expect from fraudulent exchanges, not Binance.”
Following the removal of the post, the exchange informed the media that the customer support message on X was “sent in error” and that the “SEPA deposit and withdrawal service will continue until September 25 as communicated originally”. Recent crypto exchange withdrawal issues in Europe are not unusual for the exchange. The exchange suspended Bitcoin withdrawals in May, citing a significant backlog of pending withdrawals.
Reflection on Custody in Cryptocurrencies
Reflecting on these events, it is essential to understand the importance of keeping our savings in cold wallets. Exchanges are valuable tools for trading, but they should not be the main place to store our savings (Hold).
The security and autonomy offered by cold wallets guarantee greater protection against possible vulnerabilities and attacks on exchange platforms. It is critical to be proactive in protecting our digital assets and not rely solely on third party security measures.
By Audy Castaneda
