HomeCryptoEthereumFTX will suspend ETH withdrawals during the Merge

FTX will suspend ETH withdrawals during the Merge

FTX announced that ETH withdrawals and deposits will be blocked until the end of September.

FTX will suspend ETH trading for the Merge

FTX will suspend deposits and withdrawals of ETH and ERC-20 tokens about half an hour before the Bellatrix update related to the consensus layer (epoch 144,896 on the Beacon Chain: 6 September 2022 at 11:34:47 AM UTC) and the Paris update related to the execution layer. 

With this statement on the company’s website, the FTX exchange announced that it will suspend deposits and withdrawals of ETH and related Ethereum-based tokens during the Ethereum update, scheduled for 15 September

Meanwhile, the suspension will not affect trading of the cryptocurrency, as had appeared to be understood in a later deleted company tweet.

The suspension of deposits and withdrawals is necessary, according to FTX, because one or more PoW ETH forks may emerge after the Merge. 

The company explains on its corporate website:

“If a canonical PoW ETH fork emerges, FTX will credit users with the ETH token from the PoW fork. ETH borrowers will receive ETH PoW from the fork based on their ETH balance at the time of the fork snapshot that will occur before the Paris update related to the execution layer. FTX reserves the right to update the treatment of any ETH fork PoW at any time.”

This move by the exchange was decided precisely to secure its users in the face of what is considered to be one of the biggest revolutions in crypto in recent years. Certainly, the new Ethereum update will need some time to be fully implemented and become fully operational.

The first consequence, as also stated by FTX, is that Ethereum forks may be created to preserve the old consensus system based on Proof of Work and not the new one of Proof of Stake brought by the Merge.

withdrawals eth etherum
Deposits and withdrawals blocked until the end of September

Justin Sun in favor of the Ethereum fork

Tron founder Justin Sun has emerged as one of the most staunch supporters of the need for a hard fork of Ethereum after the blockchain shifting to a Proof-of-Stake (PoS) mechanism, an event known as The Merge, scheduled for September.

Although there are those who do not believe that this fact will have much impact on Ethereum’s blockchain, which will essentially remain the same, as stated by Jonathon Miller, the Australian head of the cryptocurrency exchange Kraken, who in a recent interview explained how Ethereum’s fork might seem like a dramatic event, but that he is not worried about it at all:

“I could fork Ethereum tomorrow [but] will people use that fork? That’s a different question. That’s a question that miners have to ask themselves. Ethereum is the network of choice for developers and it will remain that way for some time.”

According to Ethereum developers, the Merge is designed to transition to PoS with no downtime due to total terminal difficulty (TTD), which will guarantee the transition based on the total mining power needed to build a chain, but evidently FTX wanted to adopt this choice anyway because it is convinced that this update will have immediate effects on the blockchain.

Then in recent days came a clarification from the Ethereum Foundation regarding the topic related to gas fees for making transactions on the blockchain, on which the new update may not even have such an impactful effect, as believed by many:

“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput.”

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.