'Sounds Shady': Elon Musk Battles Binance Over Dogecoin Issues

by Emma Newbery | Published on Nov. 23, 2021

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Woman looks skeptically at her cellphone.

Image source: Getty Images

Musk throws shade at Binance, but what's really going on?

Key points

  • Binance has temporarily suspended DOGE network withdrawals while it resolves technical issues.
  • Elon Musk says it isn't fair that Dogecoin holders should suffer for issues that aren't their fault, but Binance says the issue was caused by a Dogecoin upgrade.
  • For cryptocurrency investors, platform failure is another risk to be aware of.

Tesla CEO and self-proclaimed "Dogefather" Elon Musk has again taken to Twitter to defend Dogecoin (DOGE) investors. He's swapping jibes with Binance CEO Changpeng Zhao (usually known as CZ) over problems with Dogecoin withdrawals on the popular cryptocurrency exchange.

"Hey @cz_binance, what’s going on with your Doge customers? Sounds shady," Musk tweeted early this morning. He was replying to a post from CoinDesk about Binance's efforts to improve relations with regulators.

CZ replied: "Elon, we are pretty certain it is an issue with the latest #doge wallet. We are in communications with the devs." He included a link to a news story about a Tesla technical glitch earlier this month.

What is going on with Binance and Dogecoin?

Binance announced in a Nov. 11 blog post that it would have to suspend DOGE network withdrawals for 10 to 14 days while it resolved technical issues that arose from a Dogecoin wallet update.

In a tweet today, Binance explained: "The root cause is a technical issue during the recent upgrade process that caused old transactions to be resent to 1,674 users." The platform says it is working with Dogecoin developers to fix the issue. Apparently, other exchanges are not experiencing the same problem because Binance has a different technical wallet set up for DOGE which now needs to be completely rebuilt.

Binance apologized to the Dogecoin community, saying, "We recognize that this is not the standard of technical excellence you expect from us, but we are working our best to fix this issue."

Our top crypto play isn't a token - Here’s why

We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you've probably used this company's technology in the past few days, even if you've never had an account or even heard of the company before. That's how prevalent it's become.

Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.

Get started

However, Elon Musk is not satisfied. He told Binance, "Doge holders using Binance should be protected from errors that are not their fault."

Crypto platform glitches are not uncommon

Unfortunately for crypto investors, these types of problems happen more often than you'd think. And it can be extremely upsetting if you lose money as a result.

From crypto exchange outages during times of heavy demand to a host of temporary technical glitches, cryptocurrency investing has grown so quickly that exchanges sometimes struggle to keep up.

For example, when the whole cryptocurrency market crashed back in May, almost all the major exchanges suffered outages -- including Coinbase, Gemini, Kraken, and Binance -- as they struggled to deal with the massive surge in trading. Whether users wanted to buy the dip or try to minimize their losses by selling, they were met with frustrating error messages.

It is understandable that Dogecoin investors might blame Binance for the current issues, especially as other exchanges aren't affected. But -- and I know this won't make me popular with Shibes -- if the problem was indeed caused by a Dogecoin update, it's worth at least questioning whether Binance is completely at fault.

We've talked before about Dogecoin's lack of full-time technical support. While the doggy coin has captured people's hearts and now plans to set up a headquarters and hire paid staff, it still has a way to go.

The newly recreated Dogecoin Foundation hasn't posted any updates on its site since mid-August when it announced its reformation. Dogecoin has produced returns of almost $4,000% since the start of the year, according to CoinMarketCap data. It has a market cap of around $30 billion which puts it on a par with big international companies like H&M and Roku. And yet, it is still mostly run by volunteers.

Don't invest more than you can afford to lose

In a way, it doesn't matter whether Binance or Dogecoin caused the problem. For investors, this is a good reminder that cryptocurrency investment is still a relatively new and untested market.

  • Cryptocurrency exchanges can suffer technical issues, poor liquidity, and hacks. Investors might not always be able to sell coins when they want to and some exchanges do not have 24-hour customer service, especially telephone support.
  • Cryptocurrencies can be subject to hacks, price volatility, and technical glitches -- especially during network upgrades. Projects that have full-time developers on staff are more likely to be able to resolve any problems quickly, though that doesn't make them immune.

Many cryptocurrencies have produced extraordinary returns this year, which is one reason that more and more people are getting into crypto investing. However, many investors are not fully aware of the risks. They may be tempted to spend money they actually need day to day in the hope of receiving similar dramatic gains.

Whether it is volatility or technical failure, these are not totally safe investments. It is wise to stick to reputable cryptocurrency exchanges with good security and customer service. But the best way to protect yourself is to follow the golden rule and only invest money you can afford to lose. That way any major losses will be frustrating, but won't stop you from meeting your long-term financial goals.

Our Research Expert