A sudden burst of transactions from a wallet associated with leading cryptocurrency exchange Binance has inadvertently led to a massive 1,900% hike in Ethereum ($ETH) transaction fees after the wallet moved over $840,000 of ETH in just 24 hours.
Etherscan, an Ethereum blockchain explorer, shows that a wallet called “Binance 14” got ETH from wallets that had not been used for almost three years in a short span of time, causing Ethereum transaction fees to go up as ETH’s users had to pay more to get their transactions processed faster on the limited block space.
The cryptocurrency exchange addressed users’ concerns on social media, pointing out that these transactions were part of a “routine consolidation” of its assets into a specific wallet and recognized the surging transaction fees, discarding them as a «n “unintentional but quickly resolved” consequence of its transactions.
Many questioned the rationale behind the decision to process these transactions en masse, a move that undeniably resulted in network congestion and steeper fees than the exchange would otherwise have to pay if it timed its transactions.
This event has propelled the Binance 14 wallet to the list of the top 50 contributors to gas fees, further intensifying the debate and skepticism surrounding Binance’s operations amid lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against it, accusing the firm of violating securities law.
Notably, the transactions come shortly after an Ethereum initial coin offering (ICO) participant moved a whopping 6,000 ETH, worth nearly $10 million, to popular cryptocurrency trading platform Kraken in a move that could lead to a significant sale of tokens on the market.
Data from the Ethereum blockchain reveals that the massive whale transaction only cost around $2.8 in transaction fees. While the transaction may appear to suggest a massive entity is cashing out, it’s worth noting the whale’s wallet still has 49,000 ETH in it, worth nearly $80 million.
Featured image via Unsplash.
