The crypto exchange indicated that the problem was caused by stuck transactions and confirmed that the issue had been fixed and would not recur. 

Withdrawal Challenges Caused by UTXO (Unspent Transaction Output)

Binance, one of the largest crypto exchanges, provided an explanation of what made temporary withdrawal challenges on Monday. The issue arose from repairs that were ongoing to try and address small hardware failures. 

The giant crypto exchange wrote that it was “repairing several minor hardware failures on wallet consolidation nodes earlier today, which caused the earlier transactions that were pending to be broadcast to the network after the nodes were repaired.”

The company also indicated that “these pending consolidation transactions had a low gas fee, which resulted in the later withdrawal transactions – which were pointing to the pending consolidation UTXO – getting stuck and not able to be processed successfully.” (UTXO means unspent transaction output). 

To address the issues, the company indicated that it had to “change the logic to only take successful UTXO from consolidation transactions or successful withdrawal transactions. This fix will also prevent the same issue from happening again.”

Changpeng Zhao, the Binance CEO, initially indicated that the problem was expected to be fixed in about 30 minutes but ended up taking about three hours. The CEO confirmed that Bitcoin withdrawal on other networks was still working, and deposits were not affected. 

This explanation might help to cool down the growing fear in the crypto community after Celsius, a Crypto lending and borrowing platform, announced that it was suspending withdrawals because of “extreme market conditions.”