Whale fight: Elon Musk and CEO of Binance exchange words on twitter
After Elon Musk demanded a clarification from Binance regarding the problems involving blocked withdrawals of Dogecoin (DOGE) on the platform, the company made a statement on its twitter account and CZ (CEO of Binance) teased about problems involving Tesla in response to the billionaire.
The @dogecoin_devs page (524.4K followers) posted a thread explaining the whole situation from their point of view on November 11, 2021.
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
According to the page, Binance got in touch with dogecoin developers because of frozen withdrawal transactions on the network a year ago.
The exchange did not report which transactions were to be verified by the devs, but they believed they were stuck due to Binance’s insufficient fee payment to the network.
The company then decided to resend the transactions to its customers and the devs suggested using the same inputs as the locked transactions so that, when confirming the new transactions, the old ones would be invalidated by the network (practically being identified as a double-spend attempt). They were not told whether or not Binance followed their suggestion.
A year later, on November 10th, @dogecoin_devs was notified that previously crashed transactions were successfully transmitted suddenly.
This was after Dogecoin’s 1.14.5 update lowered the minimum network fees for transaction validation, with the intention of improving the user experience and focusing on lower fees.
So transactions that weren’t transmitted for insufficient fees could now be validated and submitted, and users who had been harmed in the previous year were again given their withdrawal amounts at that time.
In this period, Dogecoin valued approximately 9,800%, which meant that customers received almost 100x the amount received in dollars 12 months earlier.
Upon realizing what had happened, Binance contacted the benefited customers and requested the refund of the amounts, under penalty of freezing the account of those who did not cooperate.
Many customers report that they are unable to return the amounts as they have already been traded and lost value. Or, cases of P2P sellers who acted as intermediaries for customers and depend on them to make a return, but without a response.
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There are many nuances in the case, but generally speaking, some accounts remain frozen and there are also users reporting that Doge’s withdrawals are locked for everyone, harming customers who were unrelated to what happened.
The exchange’s official account published a thread explaining what happened, stated that they are aware of all the issues that are already being resolved and even informed about an update in their Dogecoin wallet to improve the future experience and avoid similar problems.
(Thread) An update on the issue we’re having with $DOGE withdrawals:
The root cause is a technical issue during the recent upgrade process that caused old transactions to be resent to 1,674 users.
— Binance (@binance) November 23, 2021
An explanation had been in demand all this time, but it wasn’t until after Elon Musk’s provocative tweet that users got an official position.
A few hours before the thread, the billionaire responded to a CoinDesk tweet about Binance, demanding action on frozen withdrawals.
Hey @cz_binance, what’s going on with your Doge customers? Sounds shady.
— Elon Musk (@elonmusk) November 23, 2021
And shortly thereafter, he got an equally provocative response from the exchange’s CEO, CZ.
Elon, we are pretty certain it is an issue with the latest #doge wallet. We are in communications with the devs. Apologies for any inconvenience that may have caused you.
What happened here? 👀https://t.co/g2J50zqbEu
— CZ 🔶 Binance (@cz_binance) November 23, 2021
With this, Binance’s CEO intends to show that there is nothing “dark”, as Elon Musk insinuated, but that this type of problem is common and can happen to any company, including Tesla, of which Elon Musk is CEO.
Elon Musk goes on to say that he doesn’t use Binance out of personal choice, but is demanding a stance on behalf of the Doge community that has gone unanswered for days. Gets a new comment from CZ that the process is tedious and time-consuming, asking for patience.