By
Steve Muchoki
May 10th, 2024
Despite the suspension of withdrawals, Binance said there will be support for spot Ethereum and ERC-20 tokens trading during The Merge event.
Binance exchange, the world’s largest cryptocurrency trading platform has announced it will be suspending Ethereum (ETH) withdrawals in the much anticipation transition of the Ethereum protocol upgrade in what is termed The Merge. As the second exchange after Coinbase Global Inc (NASDAQ: COIN) to make this move, Binance announced that the scheduled halt with occurs in two successions on September 6 and September 15 respectively.
The September 6th halt of Ethereum and ERC-20 tokens corresponds to the scheduled Bellatrix consensus layer while that of September 15th will correspond to when the Paris Execution Layer for the Beacon Chain is scheduled.
As the second-largest digital currency, and one of the most widely spread tokens in the cryptocurrency ecosystem, the Merge of Ethereum has become the major talking point in the ecosystem for some time now. With the definitive dates for the upgrade to happen, both centralized and decentralized exchanges have been outlining how they are going to support the upgrade.
Binance exchange is the second major trading platform that has revealed it will not be supporting token withdrawals during the historic upgrade. According to Binance, the halt will help protect users from the excessive volatility that may accompany the merger activity. Binance is also trending in the path of caution as it noted that two different tokens may be created by virtue of the likely Ethereum fork.
As Binance outlined, it is prepared for two major possible scenarios. First is that there will be no fork or new tokens created, in which case, it will reopen deposits and withdrawals for Ethereum and ERC-20 tokens. The second scenario is when a new token is created through the fork. In this case, Binance said it will recognize the second token, and send it to Ethereum holders on a 1:1 basis.
The exchange highlighted that while the ticker symbol ETH will be retained for the Proof-of-Stake (PoS) version of the token, it reiterated that the snapshot that will determine existing Ethereum balances will be taken just before the Paris Executive Layer goes live. The trading platform said the support for withdrawals will be created for the new token if any, and that it will issue an announcement to detail the modalities at a later date.
Binance to Support Spot Trading of Ethereum Tokens
Despite the suspension of withdrawals, Binance said there will be support for spot Ethereum and ERC-20 tokens trading during The Merge event.
“Spot trading for ETH and ERC-20 tokens will not be affected. Please ensure you take sufficient risk measures as price volatility is often high during contentious hard forks,” the exchange revealed in the announcement.
Additionally, there will be support for Margin trading, ETH Futures Trading, as well as Binance Leveraged Tokens ETHUP & ETHDOWN.
In anticipation of The Merge, Binance is anticipating uncertainties, and as such, is trying to cover all of its basis with the halt on withdrawals.