On Sunday, the world's leading cryptocurrency exchange platform Binance moved nearly $4.4 billion worth of Bitcoin between its wallets. Coming in two parts, the transfer included 117,000 and 40,000 Bitcoins and was completed with the use of offline, or cold wallets which provide users with added security during the storage and processing of digital currency. Cold wallets are not connected to the internet and are known to be a more secure alternative to hot wallets, which are commonly used for withdrawals and trading on crypto exchanges.

The incident prompted a lot of discussion with speculation that the transfer signified a large, sustained outflow from the platform. However, Binance quickly counteracted those claims by explaining that the move was actually a BTC address adjustment and not, as previously thought, part of a liquidation sale. As speculation grew, Binance halted Bitcoin withdrawals for a limited time before resuming them with higher fees placed on pending transactions in an effort to ensure that Bitcoin miners would pick them up.

The market dip on Monday may have been a direct result of the temporary suspension of transaction validity, which led to a backlog of transactions and consequently caused congestion on the Blockchain.

Regardless, the transfer accentuates the importance of secure cryptocurrency storage, especially when it involves large exchanges. The use of cold wallets is recommended over their hot wallet counterparts if users hope to avert attacks by cyber-hackers. Moreover, Binance was transparent and communicated well with their customers on the matter which was greatly appreciated.



Other News from Today