Dogecoin suffered a serious blow on Friday, plunging six percent mainly on news that Binance has suspended DOGE withdrawals due to a glitch resulting from a network upgrade.
Binance, the world's largest crypto exchange, released a statement on Thursday that they would resume withdrawals when the issue had been resolved, Markets Insider reported.
Dogecoin Price Today: Freefall Continues, Sinking 0.9% in Last 24 Hours
As of this writing, Dogecoin's price is at $0.259327, shedding 0.9 percent in the last 24 hours, CoinGecko real-time figures showed.
Binance said it is "actively working" with the Dogecoin project team to solve the problem.
Users can withdraw Dogecoin on other networks at this time, Binance added. The company said it will update investors "as soon as possible."
The upgrade apparently created problems for some Binance users, who claimed that Binance first initiated Dogecoin withdrawals without their consent and asked them to return the DOGE they don't have to their Binance accounts, Coindesk posted.
These users shared screenshots with Coindesk showing that Binance had asked them to return DOGE to the exchange. If they don't, their withdrawal function would stay deactivated. But these users claimed they actually didn't have DOGE in their Binance accounts to put back.
Dogecoin Developers Say 'Stuck Transactions' Triggered Binance Issue
In a tweet thread, Dogecoin developers clarified that the first withdrawal transactions were apparently follow-up attempts to complete requested transactions years ago that had been "stuck" due to "insufficient fees."
Providing some clarification the Binance situation: 1) A bit over a year ago, Binance notified us that they had stuck transactions. We were not shown these transactions, but it was suggested that they were 'stuck' due to insufficient fees...— Dogecoin Developers (@dogecoin_devs) November 11, 2021
Dogecoin's network upgrade might have triggered those old transactions, the developers further tweeted. On its GitHub page, the upgrade was said to have made "a new minimum fee recommendation" for all network participants. This led developers to believe the transactions that were stuck seem to have been retried, even when those users no longer have the coins in the account.
Dogecoin developers further tweeted that they tried to fix the problem with Binance when the crypto exchange first alerted them of the "stuck transactions" over a year ago, but they were not notified if they had actually followed their instructions to solve it.
Binance has yet to provide an update or any further statement on the issue.
Earlier in November, Binance suspended all crypto withdrawals for hours due to a database problem, Markets Insider further reported. Another outage happened last May that caused major losses, with investors seeking compensation.
Experts had warned investors against cryptocurrencies, especially meme tokens like Dogecoin and Shiba Inu, due to their volatility and less practical uses apart from not being regulated by a government or central bank. Binance reiterated in August that it is exercising all efforts to get compliant with regulators amid a series of regulatory bans and warnings.
U.S. Securities and Exchange Commission (SEC) chair Gary Gensler emphasized that such crypto networks must be regulated better because they carry about 95 percent of market activity.
Outages are rampant in crypto networks this year, including top exchanges Coinbase (the largest publicly listed exchange) due to a spike in network activity, and Robinhood (the popular commission-free trading platform) which lasted from hours to days.