Here’s How Exchanges Adjust Bitcoin Withdrawal Fees
Amidst the ongoing increase in Bitcoin (BTC) transaction fees, some cryptocurrency exchanges have moved to adjust the cost of withdrawing BTC from their platforms.
US-based exchange Kraken has increased Bitcoin withdrawal fees to match current on-chain fees, the company’s customer support manager wrote on Reddit on May 10.
“This helps ensure withdrawals are processed in the chain in a timely manner,” the support manager noted.
Kraken’s representative also referenced the company’s public list of cryptocurrency withdrawal fees and minimum withdrawal amounts. According to the data, Kraken charges 0.00035 BTC, or about $10, for a Bitcoin withdrawal, with a minimum amount of 0.0005 BTC, or $13.
The minimum BTC withdrawal amount on LN also differs significantly from non-Lightning BTC, from as low as 0.00001 BTC, or less than $1.
The support manager also advised customers to consider using the Lightning Network (LN) as an alternative. Adopted by Kraken in March 2022, the LN option allows users to withdraw BTC from the platform for free.
Kraken’s public withdrawal fees are significantly less than other major exchanges. Crypto exchange OKX charges between 0.00096 BTC ($26) up to 0.00192 BTC ($53) for a Bitcoin withdrawal, an OKX spokesperson told Cointelegraph. Minimum withdrawal amount is 0.001 BTC, or $27.
OKX declined to comment on whether the exchange will increase withdrawal fees due to skyrocketing Bitcoin transaction costs. The platform also implemented LN in 2022.
However, Kraken is not the only exchange to adjust BTC withdrawal fees amid the ongoing memecoin trading frenzy.
Crypto exchange KuCoin uses dynamic adjustment for BTC withdrawal fees and minimum withdrawal amounts, a company spokesperson told Cointelegraph on May 10. The adjustment is based on the amount of actual processing fees on the chain, so that Kraken is “compatible with the market situation”, noted the representative.
“At this time, our withdrawal fee is between 0.00002 and 0.001 BTC, and the minimum withdrawal amount is 0.0005 BTC,” the spokesperson stated, adding:
“Regarding Lightning Network implementation, KuCoin has not yet distributed LN, but we will actively monitor the market and make adjustments if necessary.”
KuCoin’s current Bitcoin withdrawal fees are similar to those implemented on other exchanges such as Huobi or Binance.
Related: Coinbase calls Pepe a “hate symbol”, calling for a boycott of the exchange
“On-chain withdrawal fees are increasing due to BTC network congestion. The current withdrawal fee is 0.001 BTC,” a Huobi spokesperson told Cointelegraph on May 11. Huobi has also not implemented Lightning yet. “The Lightning Network is currently under discussion ,” the Huobi spokesperson said.
According to public information, Binance also charges 0.001 BTC ($27) as a BTC withdrawal fee, while the minimum withdrawal amount is 0.002 BTC, or $55.
Despite relatively expensive BTC withdrawal fees, Binance has still experienced major problems with withdrawals amid the ongoing “memepool” congestion recently. On May 8, Binance was forced to halt withdrawals twice in 12 hours while 400,000 transactions were stuck on the Bitcoin mempool. The events have pushed Binance to seriously consider implementing LN.
Several exchanges, including Coinbase, Bybit and Crypto.com, did not respond to Cointelegraph’s request for comment.
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