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Ahmed Barakat
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AscendEX has ceased all active operations July It informed users that it could not guarantee the full recovery of their balances, raising serious concerns about the stock exchange’s liquidity. The exchange published its official notice on July 6, five days after ceasing operations, citing MiCA compliance requirements, a failed strategic transaction, and deteriorating market conditions as the main reasons behind the closure of the cryptocurrency exchange.
The July 6 notice outlined the financial challenges facing the exchange in unusually direct language. “We relied on an agreed strategic transaction which was intended to provide liquidity to grow the platform, and the counterparty did not perform; broader cryptocurrency market conditions added further pressure,” AscendEX said. The exchange added that it is evaluating the options available to account holders, while warning that it cannot guarantee the timing of withdrawals or recovery amounts.
MiCA also played a role in the decision. The EU Crypto Asset Markets Regulation came into full effect on July 1, and AscendEX does not obtain a license under this framework. However, the exchange also cited financial and operational pressures, suggesting that multiple factors contributed to its closure rather than regulation alone.
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ZachXBT marked empty hot wallets nine days before the announcement
On-chain investigator ZachXBT raised concerns publicly on June 26 after receiving multiple reports of late withdrawals from AscendEX users. His review of publicly announced hot wallet addresses on the exchange found very low balances across ETH, USDT, USDC, and SOL.
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According to reports citing ZachXBT’s Telegram mailThe exchange’s hot wallets appear to be insufficient to cover the multiple seven-figure withdrawal requests reported by users. He advised affected customers to file reports with financial regulators and law enforcement in their jurisdictions and warned against depositing additional funds.
AscendEX has since suspended automated withdrawals, with all orders now subject to manual review. The exchange also stated: “We are not in a position to provide assurances about timing or amounts today. No account holder or group of account holders is given priority outside of the documented review process.”
A platform with previous hacking and history like BitMax
AscendEX launched in 2018 as BitMax before rebranding in March 2021. Later that year, the exchange suffered a $78 million hot wallet hack that blockchain security firms attributed to North Korea’s Lazarus Group.
At the time, AscendEX said it would fully compensate affected users. This response contradicts its current position, which says it cannot guarantee the timing or amount of any asset recovery. The size of the current deficit remains unclear.
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What’s coming next for AscendEX users?
The next major development will be whether AscendEX will enter into a formal bankruptcy process. The July 6 notice states: “If any formal insolvency or similar process is initiated, the treatment of unresolved balances or claims may be subject to that process.” While such action has not been announced, the exchange has acknowledged the possibility.
Users who have funds on the platform must maintain account records and withdrawal requests. Following ZachXBT’s recommendation, affected customers may also consider reporting their cases to financial regulators and law enforcement in their jurisdictions. Currently, withdrawals remain under manual review, and AscendEX has not provided a timeline for resolving the outstanding claims.
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