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(Kitco News) –
Binance, the largest cryptocurrency exchange in the world, was forced to suspend all trading, deposits and withdrawals early Friday morning, provoking panic from market participants and prompting hurried reassurances from CEO Changpeng Zhao (CZ).
“We are aware of an issue impacting spot trading on Binance,” the exchange tweeted shortly after 7:30 am EDT. “All spot trading is currently temporarily suspended as we work to resolve this as soon as possible.”
Soon afterward, CZ took to Twitter to provide more details. “Initial analysis indicates matching engine encountered a bug on a trailing stop order,” he wrote. “Deposits & withdrawals are paused as a SOP (standard operating procedure).” He added that all funds were safe and trading was expected to resume within two hours.
The shutdown of the exchange immediately impacted Bitcoin, with market participants selling on other exchanges amid concerns about what the problems at Binance might entail, driving BTC from $28,055 to a session low of $27,541 within minutes.
Shortly after 8:30 am he returned with an update. “Engine 1 is back online. Still need more time to do reconciliations, and for other engines to catch up. We were a bit unlucky with this bug. Our engines take hourly snapshots. This bug happened 57 min in. So, replay/reconciliation takes a bit longer.”
Crypto holders were becoming increasingly nervous about the potential impact of the halt on prices. “Not quite in the mood for trivia – more interested in answer to question whose risk it is if spot price falls while waiting (which is bad for sellers)…” wrote twitter user etc_chmod.
CZ replied, attempting to reassure traders whose crypto was frozen on Binance while prices fell on other exchanges.
“When the biggest exchange halts trading, prices won’t move much,” he wrote. “If it moves on smaller exchanges, when #Binance comes back, our deeper orderbook will bring the price back, causing those guys to lose money. Traders know this.”
At 9:30 am, CZ posted another update, moving the ETA for the resumption of trading until after 10 am and outlining the stages that different functions would be available.
Est 60 min ish ETA. Our team’s doing pre-trading tests now. For those new with us, our resume SOP is roughly as follows:
Announcement with exact times (soon).
Deposit enabled (done now).
Internal transfers enabled (done now).
30 min of cancel-only mode (not yet)
Resume trading… https://t.co/ZtkhTkD1CD— CZ ?? Binance (@cz_binance) March 24, 2023
A few minutes later, Binance announced that trading would resume at 10 am EDT and published a statement on their website. “Starting from now, users will be able to cancel orders, process deposits, trade on P2P, and perform lending, redemptions, asset transfers and all other account-related functions,” they wrote. “Withdrawals will be resumed shortly after spot trading starts.”
Significantly, trailing stop order functionality would not be part of the resumption of service, and “will be temporarily suspended until further notice,” with all existing trailing orders expiring automatically.
“It is recommended that futures and margin trading users with open positions re-assess their collateral balances prior to the start of spot trading to mitigate against price fluctuations that may occur,” they wrote in the statement.
At the time of writing, trading has resumed on the Binance platform and Bitcoin has recovered to a session high of $28,208.
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