FTX to pause ETH deposits and withdrawals during Merge

ETH deposits and withdrawals on secondary blockchains to be suspenced to protect customers from Merge uncertainty

Ethereum Merge expected to be completed by the end of September - Photo:Shutterstock

One of the world’s largest cryptocurrency exchanges is to suspend ETH transactions on secondary blockchains until the Ethereum ‘Merge’ is completed. 

FTX announced that “ETH will remain trading through the Merge.” However, the company said, trading on Arbitrum One ETH will be suspended this week, while activity on Solana ETH and Binance Smart Chain ETH will halt next week.

Deposits and withdrawals will only reopen when the Merge is completed and networks are stable. 

Ethereum clarifies misconceptions

The announcement will likely have disappointed Ethereum’s developers, who have promised in the run-up to the “Merge” that there will be no downtime in trading activity during the transition from a proof-of-work system to a proof-of-stake system. 

These developers have argued that the terminal total difficulty (TTD) will guarantee the transition based on the total mining power devoted to building a chain. 

The Ethereum Foundation, issuing a clarification on misconceptions surrounding the transition recently, said: “Mining will no longer be the means of producing valid blocks. Instead, the proof-of-stake validators assume this role and will be responsible for processing the validity of all transactions and proposing blocks.”

It added: “No history is lost… You don't need to do anything. Your funds are safe.”

Uncertainty remains

Despite such assertions, some parts of the cryptocurrency community have put measures in place to ensure that investor funds are protected.

FTX said in its announcement: “Trading digital assets confers high risk due to large price fluctuations. Before trading, please have a full understanding of all the risks associated with investing in digital assets.” 

Ethereum traded up by 0.7% at $1,565 by 11:00 (BST-1) on Monday. 

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