• Binance, the world’s largest cryptocurrency exchange by trading volume, encountered a bug in its matching engine and temporarily halted deposits and withdrawals.
• CEO Changpeng Zhao noted that the decision was part of their standard operating procedure (SOP) to ensure funds remain safe.
• After identifying the issue with Engine 1, Binance restarted it and resumed crypto trading after running pre-trading tests.
Binance Halts Spot Trading
Binance, the world’s largest cryptocurrency exchange by trading volume, earlier today, on March 24, temporarily halted spot trading due to a matching engine glitch that disrupted the platform.
Bug Detected; Withdrawal & Depositing Halted
The CEO of Binance, Changpeng Zhao (CZ), said they detected a bug during an analysis of a trailing stop order recovery. As a result, the exchange temporarily had to pause deposits and withdrawals for safety measures as part of their standard operating procedure (SOP).
Spot Trading Explained
Crypto spot traders buy or sell assets without using leverage positions. That means users can directly swap crypto or fiat for other crypto assets and vice versa. Spot trading is distinct from derivatives trading, where traders can open Bitcoin or BNB positions, for example, using leverage or borrowing money from the exchange for a bigger risk.
Pre-Trading Tests Run Before Resuming Crypto Trading
In response to an inquiry about halting withdrawals, CZ stated that the state of orders in the matching engine directly affects funds available for withdrawal in user accounts because the logic checks with the matching engine as a security procedure before processing withdrawals. After identifying the issue with Engine 1, Binance restarted it and ran pre-trading tests before resuming crypto trading after 30 minutes of “cancel-only period.”
Conclusion
The Binance team managed to identify and resolve this issue quickly despite its large scale operations as it has achieved 100% uptime in 2022. To prevent similar issues from occurring again in future operations, they will run pre-trading tests before resuming crypto trading activities on their platform.