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Peter Davis

An writer at FOMOdrive

  • Jun 19, 2023
  • 2 min read

Bitcoin (BTC) collapsed due to the situation around the Binance exchange

On Monday, Bitcoin experienced a further decline, sinking below the $28,000 mark due to speculation that Binance might be facing a crash.

Twice, the world's biggest cryptocurrency exchange has halted the ability of its customers to withdraw Bitcoin.

The US Department of Justice also has suspicions that Binance is providing services to Russian users.

On Monday, Binance, the largest crypto exchange in the world, suspended the withdrawal of Bitcoin (BTC) twice due to network congestion.

Rumors of the exchange "soon to go bust" spread throughout the crypto market, causing fear, uncertainty, and doubt (FUD) among its participants.

To expedite the "unloading" of the backlog of bitcoin transactions, Binance has raised the withdrawal fee. The exchange team has stated that they are working to confirm all pending transactions. To accelerate this process, the Lightning Network has been enabled for fund withdrawals.

The specialists in cryptocurrency exchanges have guaranteed that the funds of their clients are secure. This is due to the activation of the Bitcoin Taproot update and the implementation of "serial numbers", which have caused a strain on the Bitcoin network and caused the mempool to become congested.

Last June, Binance CEO Changpeng Zhao announced that users of the exchange would temporarily not be able to withdraw bitcoins due to the fall in the prices of major cryptocurrencies. This is not the first time that Binance has suspended the withdrawal of crypto assets; it has happened before.

CryptoQuant reported that, since May 7, Binance has experienced a major withdrawal of Bitcoin. On that day, users moved out a total of 195,000 BTC, which is worth more than $5.6 billion.

The US Department of Justice's investigation into Binance has only worsened the situation. Bloomberg reports that US authorities believe the exchange may have violated sanctions laws. This is especially concerning as Binance allows Russian users, which goes against the restrictions imposed on Moscow.

According to Reuters, in 2022, Binance processed payments worth $10 billion for criminal organizations and companies that sought to bypass US sanctions.

The US Justice Department declined to comment when asked about Binance's compliance with US and international financial sanctions.

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