Binance suspends all spot trading on its platform after software glitch

Binance, the world’s largest crypto exchange, has suspended all spot trading on the platform after a software glitch.

Shortly after the outage, chief executive Changpeng Zhao said the company had traced the issue to a bug in its so-called matching engine, where customers’ buy and sell orders are processed.

He added that deposits and withdrawals were suspended but said the suspension was “standard operating procedure”.

In a Twitter post on Friday Binance said it was working to “resolve this as soon as possible”. A spokesperson for the exchange, which controls almost two-thirds of the crypto trading market, did not immediately provide further comment.

A former employee who worked in risk and compliance at the global exchange said it was “definitely not standard procedure”.

“If I was still at Binance, I would be activating business continuity and disaster recovery measures as soon as possible,” the person said. “From a risk perspective, this is serious.”

According to data provider CryptoCompare, Binance stopped trading at 11.27am London time on Friday. The sprawling crypto group has cemented its hold on the market since the collapse of rival exchange FTX in November. At the start of the month, CryptoCompare figures showed Binance controlled more than 60 per cent of the crypto spot market.

In 2018, the year after it was founded, Binance halted trading and customer withdrawals of funds after what the company described as a “significant increase in users and trading activity”.

Last month, a Binance-branded stablecoin — a kind of crypto token designed to track the dollar — came under fire from New York regulators, which halted further issuance of the coin. By the end of February, investors had pulled more than $6bn out of the token, in a sign that New York’s crackdown on the stablecoin was putting pressure on the exchange.

In a Twitter Spaces session this year, Zhao said the token — which trades under the ticker BUSD — was never “big business” for the exchange. However, the token represented 40 per cent of trading volume for Binance by the end of last year.

The exchange has also come under scrutiny from regulators around the world, including the UK’s Financial Conduct Authority, which said in 2021 that Binance was not capable of being effectively regulated after the company failed to provide basic information.

More recently, American regulators have taken aim at Binance over its alleged links to illicit activity. FinCEN, a financial crime watchdog, named the exchange as a counterparty to Bitzlato, a crypto exchange whose founder was charged with transmitting more than $700mn in illicit cryptocurrency funds that fell foul of US money laundering regulations.