Binance Bitcoin Withdrawals Paused, Sparks Fear of FTX 2.0

Summary of Article

  • Binance has had trouble processing Bitcoin withdrawals in the last 24 hours, sparking market concern.
  • Twitter users have drawn comparisons to the collapse of FTX and other centralized crypto platforms from last year.
  • FTX collapsed due to a run on deposits that exposed a hole in its balance sheet.

Background Information

Binance, generally considered the largest crypto exchange, has had trouble processing Bitcoin withdrawals in the last 24 hours. This has caused market concern and understandably so. Last year, several centralized crypto platforms, such as FTX, collapsed leading to users becoming more skeptical of the health of centralized crypto businesses. As a result, Twitter users have drawn comparisons between Binance’s issues and FTX’s collapse.

The Collapse of FTX

In November last year, FTX collapsed after a run on deposits exposed a significant hole in its balance sheet. At this time it was expected that crypto exchanges should maintain a full reserve of customer deposits at all times; however this clearly was not the case with FTX. Former Chief Executive Officer Sam “SBF” Bankman-Fried tried to reassure customers via Twitter by claiming that user withdrawals could be covered; however this tweet was later deleted.

Recent Issues with Binance

Binance paused Bitcoin withdrawals twice in less than 12 hours due to network congestion and data initially suggesting over 127,000 BTC outflows caused further panic among customers. Self-described contrarian investor “WhaleWire” alleged on Twitter that customer funds were unsafe; however he provided no evidence to support his claim. Others also expressed similar views about Binance experiencing an issue similar to what was seen with FTX.


Despite assurances from Binance that they are attempting to remedy the situation and restore normal service levels as soon as possible, customers remain anxious about their funds being secure; particularly following what happened at FTX just months prior. It remains unclear if further issues will arise or if user funds are safe at this time; only time will tell.