Binance stops Bitcoin withdrawals for the second time in 12 hours; The number of Bitcoins on cryptocurrency exchanges are decreasing; Kazakhstan collects $7M from crypto mining taxes
Crypto exchange Binance halted Bitcoin (BTC) withdrawals for the second time on May 8. Binance noted a large backlog in pending withdrawals.
The exchange added that transactions are still pending, as the fees set cannot predict the recent high transaction fees on the Bitcoin network.
Almost two hours after its initial announcement, Binance announced that it replaced pending Bitcoin withdrawal transactions with higher-fee transactions, allowing them to be approved by mining pools.
About three hours after its initial announcement, Binance announced that Bitcoin withdrawals have resumed, with pending transactions being processed with higher transaction fees.
Binance also stated that it is working on enabling withdrawals via the Lightning Network, which could reduce withdrawal pauses in the future.
Earlier, on May 7, Binance had to temporarily stop withdrawing Bitcoins due to the transaction intensity on the blockchain. Filming reopened an hour and a half later.
At that time, the Bitcoin mempool had about 400,000 transactions waiting to be processed. According to data from Mempool.space, that number jumped to around 485,000 during Binance’s second withdrawal stop.
Mempool is an area where transactions in the Bitcoin network wait before being verified by each blockchain node.
On May 7, Binance saw a massive net negative outflow of $4.95 billion worth around 175,650 BTC according to CryptoQuant data.
Binance claimed that this withdraw data was actually due to itself moving Bitcoin between hot and cold wallets.
The number of Bitcoins on cryptocurrency exchanges is decreasing
The cryptocurrency community is awash with speculation and concerns about the massive outflow of money from one of the largest cryptocurrency exchanges, Binance, on May 8.
However, the initial concern appears to be unfounded, as the majority of Bitcoin transfers are internal transfers to newly created addresses owned by Binance, not exits. According to CryptoQuant head of research Julio Moreno, the effective exits have reached a much smaller figure, most likely around 10,100 Bitcoins.
Moreno’s tweet, which garnered great attention, revealed two large transactions of 117,000 and 40,000 Bitcoins. This initially caused panic in the crypto community. However, it was later revealed that these were internal Binance transfers to change addresses rather than withdrawals made by users. This means that the actual exits from the stock market are much less than originally thought.
Binance continues with withdrawals. The exchange stated that it processes pending transactions by replacing them with higher transaction fees to ensure faster completion. In addition, Binance announced its plans to adjust fees to prevent similar situations from occurring in the future, and expressed its commitment to monitoring activity on the chain and making necessary adjustments as needed.
Kazakhstan collects $7M from crypto mining taxes
According to reports in Kazakhstan’s local media, the Kazakhstan government has collected a tax of 3.07 billion tenge (approximately $ 7 million) in 2022 from businesses engaged in mining cryptocurrencies.
According to 2023 data from the government, mining fees collected until April 27 approached 240 million tenge. This shows that it has risen above about $541,000. Tax revenues for 2023 are extremely low compared to 652 million tenge in 2022.
Kazakhstan is among the top Bitcoin mining centers in the world. According to data provided by the Cambridge Center for Alternative Finance, Kazakhstan has been the third largest contributor to the Bitcoin hash rate since January 2022, after the United States and China.
Mining was taxed
Kazakhstan imposed a tax on crypto mining in January 2022, based on the electricity consumption of entities. The use of low-tax electricity by crypto miners caused reactions in the country. After this development, it was decided to tax crypto mining.
In 2021, many crypto miners moved to Kazakhstan. It was stated that after the crackdown on China’s crypto miners, over 87,000 mining devices were brought to the country.
The Kazakhstan government has announced that they want to introduce new cryptocurrency regulations to prevent tax evasion and illegal business operations.