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After previously absorbing the cost of users making withdrawals of crypto-actives on Coinbase Pro, the US exchange informed its customers that a withdrawal fee had been introduced for all crypto-actives. This follows a sharp increase in transaction fees on the Ethereum (ETH) network, which at the beginning of the month reached historic highs with median fees of more than $8.
In the Coinbase Pro email sent out Thursday, the exchange indicated that the fees for removing the cryptos were implemented “starting today, based on our estimate of the transaction fees on the network”.
“Historically, Coinbase Pro has absorbed these fees on behalf of our customers. However, as cryptos have begun to be used extensively in areas such as DeFi, payments and other projects, networks have become busier, resulting in longer waiting times and higher fees as users compete for confirmation of their transactions more quickly,” said the exchange.
Commenting on the new policy, several Reddit users expressed their frustration, one of them calling the exchange “The new bank … Just like the old bank”, and another said that “if they are going to charge network fees, they should at least allow users to adjust them manually”.
And even though Coinbase Pro is under fire from users about this change, several other exchanges are already charging withdrawal fees for the cryptos held by users on their platforms, while others may be forced to increase their fees.
Posting on Twitter earlier this month, Binance CEO Changpeng Zhao apparently joked that his exchange may be forced to raise fees due to high gas prices on Ethereum in particular. This “poses problems for most exchanges,” the CEO said at the time, while claiming that they were operating with a loss of $10 to $20 for each user’s withdrawal.
Binance currently charges customers a withdrawal fee of 0.005 ETH ($1.93 USD) for ERC-20 transfers of ETH and other Ethereum-based tokens.
The introduction of the withdrawal fee on Coinbase Pro yesterday comes after sister exchange Coinbase, Binance, and several others listed the new UNI token on the Uniswap decentralized exchange yesterday. The listing on many exchanges came just hours after the Ethereum-based token was launched, making it one of the fastest listings of a new token in crypto history.
However, the rush of Uniswap users to claim their tokens also quickly clogged the Ethereum network, with soaring gas prices and a resulting increase in the number of pending transactions.
Since then, many clones have swarmed Ethereum’s network and the gas fees have reached all time high costs. For a discussion on how Ethereum might try to lower these fees, this is the place.