In a recent development, Binance, the world’s largest cryptocurrency exchange, has temporarily suspended withdrawals to the Solana network, attributing the decision to an “increased volume of transactions.” The official statement released on March 6 outlines Binance’s expectation to implement a solution and resume withdrawals starting on March 9.

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• Binance, the world’s largest cryptocurrency exchange, temporarily suspends Solana withdrawals due to increased transaction volume.
• Amidst the withdrawal suspension, Solana’s native SOL token experienced a surge in daily trading volume, reaching $9.5 billion.
• Multiple cryptocurrency exchanges, including Binance, face performance challenges due to heightened trading activity in the market.

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Binance Temporarily Suspends Solana Withdrawals Amidst Surging Transaction Volume

According to the press release, Solana (SOL) network withdrawals have been intermittently suspended since March 4 due to the heightened transaction activity. Binance has acknowledged the surge and is actively working on optimizing the system. A long-term solution is scheduled for implementation on March 9 at 18:00 (UTC).

While Solana faced network stability challenges on February 6 during a five-hour outage, the blockchain platform has not issued public statements regarding the current situation. Whether Binance’s suspension is directly linked to Solana’s stability issues remains uncertain.

Simultaneously with Binance’s announcement, Solana’s native SOL token experienced a substantial increase in daily trading volume, reaching $9.5 billion—reminiscent of figures seen in September 2021, when SOL was trading at $209. Despite a 3.8% decline in the 24 hours leading up to 10:40 a.m. UTC, when the token was trading at $127.81, the token witnessed a notable 14.5% increase on the weekly chart.

The decision by Binance aligns with a broader trend of cryptocurrency exchanges grappling with performance issues amid surging trading activity. Major exchanges like Coinbase, Kraken, and Bybit faced similar challenges last week.

Coinbase, in particular, faced irregular activities as users reported issues such as displaying a $0 account balance. The fact that, despite continuous improvements, login errors, sending, and receiving might happen for users who experience high demand is what Coinbase has warned clients about.

Ivo Crnkovic-Rubsamen, Chief Strategy Officer and Technical Lead for Trading at the dYdX exchange, attributed the spike in performance issues to a surge in retail interest combined with increasing workloads from algorithmic trading firms. Such quick price movements caused high-frequency trading firms to make trading the biggest decrease in order, and it turned out that matching engines were under strain.

Binance’s notice of increased trading volumes follows Bitcoin’s new all-time high above $69,200 on March 5. Bitcoin briefly exceeded the market cap of silver, becoming the world’s eighth-largest asset.

Despite recent challenges, Binance was awarded the Cyber Security Professional Merit Award by Hong Kong authorities in 2024 under the banking and finance category, marking it as the sole Web3 firm to receive such recognition.

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