Investing.com -- Binance, the world’s largest cryptocurrency exchange, paused Bitcoin withdrawals for the second time in about 12 hours on Monday, citing congestion on the blockchain due to a high volume of pending transactions.
The step was taken due to a “large volume of withdrawal transactions from Binance still pending,” Binance said on Twitter, as the exchange did not anticipate a recent surge in Bitcoin gas fees.
Gas fees are a cost paid by users of a blockchain to its validators every time they wish to transact on the network. Bitcoin recently saw a spike in gas fees amid increased interest in a new token standard, BRC-20, which spurred the launch of several new memecoins this year.
Binance had earlier on Sunday suspended withdrawals for about an hour, citing congested networks. Other major crypto exchanges such as Coinbase (NASDAQ:COIN) and Kraken had not announced any pauses in withdrawals.
BRC-20, which was launched earlier this year by a coder known as “Domo”, allows users to deploy new tokens on the Bitcoin blockchain. This in turn saw the rise of several new memcoins, sparking a speculative trading frenzy where users raced to be early buyers in a new wave of tokens.
This resulted in increased trading activity on the Bitcoin blockchain, pushing gas fees to near two-year highs. But it also saw traders fall prey to a slew of new pump-and-dump schemes, a recurring incident in crypto markets.
Binance had also listed several of the new memecoins generated under the BRC-20 standard, most notably the PEPE token. But the exchange had also warned users of a potential speculative bubble, stating that the tokens had no utility.
Broader crypto markets weakened on Monday, with Bitcoin down 2.2%, while Binance's native token, BNB, fell 1.5%. World no.2 cryptocurrency Ethereum fell nearly 2%.