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The cryptocurrency community was abuzz with speculation and concern over massive outflows from Binance, one of the largest cryptocurrency exchanges, on May 8.
However, it seems the initial apprehension was unwarranted, as the majority of the bitcoin transfers were not outflows but rather internal transfers to newly created change addresses belonging to Binance.
According to Julio Moreno, head of research at CryptoQuant, the effective outflows amounted to a much smaller figure, most likely around 10,100 bitcoin.
Moreno’s tweet, which garnered significant attention, revealed two large transactions of 117,000 and 40,000 bitcoin, initially causing alarm within the crypto community.
However, he later clarified that these were internal Binance transfers to change addresses, rather than withdrawals by users. This means that the actual outflows from the exchange were far less than what was initially believed.
Binance resumes withdrawals
Meanwhile, Binance confirmed in a series of tweets that bitcoin withdrawals had resumed on their platform after a temporary suspension. The exchange stated that it was processing pending transactions by replacing them with higher transaction fees to ensure faster completion.
Additionally, Binance revealed plans to adjust fees to prevent similar situations from occurring in the future and expressed a commitment to monitoring on-chain activity and making necessary adjustments as required.
To further address concerns and improve withdrawal efficiency, Binance announced that its team is working on enabling Bitcoin Lightning Network withdrawals. This development will help in alleviating withdrawal congestion during high-demand periods, as the Lightning Network allows for faster and cheaper off-chain transactions.