Amid news of the U.S. Justice Department's investigation of possible Russian sanctions violations and after many people were alarmed by the record outflow of BTC from the exchange wallets, Binance suspended BTC's withdrawal twice this weekend, immediately nuking the bitcoin price and the broader crypto market's value.
Now let's deal with it step by step, record-breaking outflows first.
Typically, a crypto Twitter might interpret this as a bullish sign (coins moving from an exchange, hence they're probably not planning to be sold anytime soon), but not against this news landscape, seemingly.
People wondered whether whales or insiders were "jumping ship," but it's unlikely to be true.
And later on, @binance confirmed a version of moving funds between the exchange's own wallets:
…And even tried to present it as a “bull market issue“:
As of Sunday afternoon, the total number of unconfirmed Bitcoin transactions in the network's mempool was around 395,000, according to mempool.space. This is a significant increase from the 56,500 recorded on April 26th, according to Blockchain.com. Of course, this cannot but affect the size of transaction fees, previously observed only at the peak of the hype during bull markets.
On resuming withdrawals after the second pause on Sunday, Binance called it a "learning opportunity" and noted that it'd adjust withdrawals fees and work on enabling BTC Lightning Network support in the next few months.
Now, can we conclude that Binance is completely fine, the FUD surrounding it is baseless, and there's no reason to be worried? I don't think so, and Swan Bitcoin recently published a comprehensive long-read about that: "Binance: Raising Eyebrows Since 2017" (I highly recommend reading it). Just this weekend's events should probably be viewed more as a reminder of the associated risks rather than a genuine reason for panic.
And the advice from the tweet above about "playing it safe and self-custody" is always relevant. But maybe it's especially relevant these days because now the atmosphere in the market feels quite the opposite of what it was in December.