Bithumb Halts Gravity (G) Deposits and Withdrawals After Network Instability
South Korean exchange Bithumb suspended deposits and withdrawals for the Gravity token (G) on Feb 9, 2025 at 23:55 UTC after detecting persistent network instability on the Gravity blockchain. The exchange said trading of G against other cryptocurrencies and KRW remained active; only external transfers were blocked. Bithumb’s security team opened an investigation and pledged ongoing updates via official channels. Gravity is a cross-chain communication protocol linking Cosmos-based chains with ecosystems such as Ethereum and Bitcoin; typical causes of such outages include node sync problems, consensus failures, congestion or bridge malfunctions. Bithumb framed the suspension as a precautionary security measure consistent with industry practice, aimed at preventing fund loss from reorganizations or double-spend risks. Initial market reaction was muted with minimal price impact on competing exchanges. Bithumb’s swift suspension and transparent communication align with South Korea’s strict regulatory environment requiring incident reporting. Traders should note limited liquidity for on-chain transfers of G until services are restored, potential short-term volatility, and the possibility that prolonged suspension could increase uncertainty and wider market impact.
Neutral
The immediate impact is operational rather than systemic. Bithumb restricted only deposits and withdrawals for Gravity (G) while allowing trading to continue, and initial price movements were minimal—both signs of limited market disruption. The suspension is a precautionary security response common among exchanges when a chain shows instability; such actions typically prevent larger losses but do not imply exchange solvency issues. Short-term implications: traders face restricted ability to move G off-exchange, which can reduce arbitrage and on-chain liquidity and may cause localized volatility for G. If the suspension is brief (24–72 hours), markets usually normalize quickly. Long-term implications: repeated or prolonged Gravity network instability could erode confidence in the protocol and increase risk premia for G, potentially weighing on price and liquidity across venues. Historical parallels: temporary deposit/withdrawal halts (e.g., past Solana or Polygon incidents) caused short-lived volatility; prolonged outages had larger negative effects. Overall, because trading remained open and communication was transparent, the likely market effect is neutral unless the technical fault persists or reveals a deeper security flaw.