Bitstamp and KuCoin Pause Ethereum Withdraw Due to Overloads
ExchangesBit News Today3 min read
Two of the largest cryptocurrency exchanges, Bitstamp and KuCoin, announced yesterday they have temporarily suspended Ethereum withdrawals due to network congestion. Both exchanges cited an overload of pending transactions on the Ethereum blockchain as the reason for the pause. ## Network Congestion and GAS Fees Rise
Ethereum users have been facing significant delays in transaction confirmations recently, as the number of pending transactions continues to rise. The rise in popularity of decentralized exchanges, games, and ICOs on the Ethereum network has led to a congestion issue. This congestion is causing many transactions to have a long wait before being confirmed and included in a block on the blockchain. The high volume is making it increasingly expensive to get transactions included.
Users must pay a "gas" fee in Ether to have their transactions picked up and included in a block. As demand to get transactions included in the next block increases, so too does the price of gas. In recent days, gas prices for a simple Ethereum transaction have more than tripled, making it prohibitively expensive for many. ## Exchange Response
In order to protect their users, both Bitstamp and KuCoin have implemented a temporary pause on Ethereum withdrawals. According to Bitstamp, they are working to address the current network overload and will resume Ethereum withdrawals as soon as the issue is resolved.
KuCoin echoed that statement, and said they are actively monitoring the situation and will lift the withdrawal suspension as soon as there is a significant reduction in the backlog of pending transactions.
A spokesman for KuCoin said that the exchange is in communication with core Ethereum developers, and is awaiting updates on the severity and expected duration of the congestion issue.
Neither exchange has announced a specific timeline for when they expect the Ethereum withdrawal suspension to be lifted. Until then, Ethereum traders are encouraged to avoid making withdrawals from either exchange until further notice. ## Investors Uneasy
Investors are feeling the pinch, and are expressing frustration with the situation. One prominent Ethereum owner and advocate, who goes by the name "Udi Wertheimer", said on twitter:
"That feeling when you only have ETH on an exchange and you need to move it elsewhere, but withdrawals are paused indefinitely due to network congestion."
This is far from the first time an Ethereum-based exchange has had to pause withdrawals due to network congestion. Last summer, several exchanges had to take this temporary step when a new cryptocurrency called "CryptoKitties" gained massive popularity, clogging up the Ethereum network with transactions associated with the game.
Since then, there have been additional instances where exchanges have had to pause withdrawals due to Ethereum network congestion. For example, in November, the exchange OKEx had to pause Ethereum withdrawals when network conditions significantly slowed down their ability to process withdrawals in a timely manner.
The situation highlights the need for a solution to the congestion problem on the Ethereum blockchain. With many more decentralized applications and projects being built on the Ethereum blockchain, the network is likely to continue to face these congestion issues in the future.
According to the Ethereum developers, they are working on several technical solutions to the scalability problem, but don't expect to have a full solution in place for another couple of years, at least.
For the time being, Ethereum investors and traders will need to manage the inconvenience of network congestion, and exchange withdrawal pauses.
