Sunday, September 25, 2022

FTX Pausing Ethereum Deposits and Withdrawals for Merge, Supporting Fork Tokens

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Key Takeaways

  • FTX will be pausing ETH and ERC-20 token deposits and withdrawals for at least 30 minutes during two crucial Ethereum updates.
  • The Bellatrix update is scheduled for September 6, while the Merge itself is expected to happen on September 15.
  • FTX will furthermore credit its users with forked ETH tokens should a forked, Proof-of-Work version of Ethereum arise following the Merge.

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Users of leading crypto exchange FTX will not be able to withdraw or deposit any ETH or ERC-20 tokens to the platform for at least 30 minutes while the Ethereum network undergoes two crucial updates this month.

FTX Follows Coinbase and Binance

FTX has a battle plan for the “Merge.” The leading crypto exchange announced in a video that it would pause customer deposits and withdrawals of certain tokens during two upgrades related to Ethereum’s upgrade to Proof-of-Stake. 

Ethereum is set to switch from a Proof-of-Work consensus mechanism to Proof-of-Stake, an upgrade known in the crypto community as the “Merge.” The highly anticipated transition, years in the making, is expected to reduce ETH token emissions by 90% and reduce the energy consumption of the blockchain by 99%. 

While the Merge itself is scheduled for September 15, Ethereum will be going through a preparatory upgrade called Bellatrix on September 6. FTX indicated it would pause ETH deposit and withdrawal services 30 minutes before each event. ERC-20 tokens, meaning tokens native to the Ethereum blockchain like AAVE or UNI, will also be impacted by the measures. However, token spot trading, margin trading, and futures trading services on the exchange will remain unaffected.

FTX also declared that, should miners decide to fork Ethereum to keep an Ethereum Proof-of-Work chain running after the Merge, the exchange would credit users with forked ETH tokens based on their ETH balance at the time of the fork snapshot. The company indicated it would consider whether or not to list the forked ETH tokens at a later date.

Other major crypto exchanges have taken similar steps ahead of the Merge. Coinbase announced two weeks ago that it would also pause ETH deposits and withdrawals, calling the measure “precautionary.” Binance is following the same plan; just like FTX, the exchange plans on crediting its users with forked ETH should a split happen. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

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Source Link: https://cryptobriefing.com/ftx-pausing-ethereum-deposits-withdrawals-merge-fork-tokens/?utm_source=category_feed&utm_medium=rss

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