AscendEX Exchange Announces Shutdown! Concerns Over Insufficient Hot Wallet Assets Rise, Users Panic Withdrawals

AscendEX Announces Cessation of Operations, Platform Fully Terminates Trading Services

Cryptocurrency exchange AscendEX has announced that it will cease all platform operations starting in July, no longer offering account openings, deposits, spot trading, derivatives trading, staking, lending, and other digital asset services. The official statement indicates that the platform will only retain limited account access functions, allowing users to complete asset withdrawals, download transaction records, update KYC information, and submit customer service complaints, with the operational shutdown process to be gradually completed thereafter.

AscendEX stated that the decision to cease operations is related to multiple factors, including the failure to obtain relevant operating licenses after the official implementation of the EU's Markets in Crypto-Assets Regulation (MiCA), as well as changes in the market environment, increased operational costs, and liquidity pressures, making it difficult for the company to continue providing services.

The official also revealed that the originally planned strategic trading ultimately could not be completed, impacting the company's financial arrangements and becoming one of the significant reasons for the operational shutdown.

Withdrawals Now Require Manual Review, Users Begin to Worry About Asset Safety

The official announcement stated that starting July 6, all withdrawal requests will require manual review, and the automatic withdrawal system will be fully suspended. The platform indicated that each withdrawal must complete multiple manual verification processes, including KYC, AML, sanctions lists, and asset balances, which will significantly slow down the withdrawal speed, and some cases may require additional documents to continue processing.

It is worth noting that AscendEX also stated that it cannot guarantee the completion time for all withdrawal requests, nor can it guarantee the final amount that can be withdrawn. This statement has raised significant market attention and caused many users to worry whether the platform has already encountered a funding gap. Users on social media have reported that their withdrawals have been stuck in processing status for an extended period, with some stating they have not received their assets after waiting for several days, leading to growing concerns about the platform's liquidity.

ZachXBT Questions Insufficient Hot Wallet Liquidity, On-Chain Data Raises Concerns

Well-known on-chain investigator ZachXBT publicly stated before the official announcement that he had received multiple reports from AscendEX users regarding abnormal withdrawal cases. Based on on-chain data, he pointed out that the current balances of major assets such as Ethereum ($ETH), Tether ($USDT), $USDC, and $SOL in AscendEX's publicly disclosed hot wallets are quite limited, showing a significantly low liquidity compared to the known withdrawal demands from users.

ZachXBT stated that the total amount of confirmed withdrawal requests has reached several million dollars, but the observable assets in the hot wallets are insufficient to fully meet these withdrawal demands.

He also reminded users to avoid continuing to deposit assets into AscendEX until the platform has completed all withdrawals. Following the platform's announcement to cease operations and fully adopt manual withdrawal reviews, the market has begun to focus on whether the platform needs to allocate assets through cold wallets or take other measures to handle subsequent withdrawal demands.

Since most assets of exchanges are usually stored in cold wallets, insufficient hot wallet balances do not directly prove that the platform is insolvent. However, until the official discloses the complete asset allocation and withdrawal progress, the market will continue to monitor whether the platform has sufficient liquidity to fulfill all users' withdrawal obligations.

Post-Operation Shutdown Arrangements, Market Continues to Monitor Asset Return Progress

AscendEX was established in 2018, initially operating under the BitMax brand, and was renamed AscendEX in 2021. The platform was hacked that same year, resulting in a loss of approximately $78 million from its hot wallets, but it continued to operate. In recent years, with the rapid changes in the global regulatory environment and increasing competition among exchanges, the platform ultimately decided to cease operations, becoming another mid-to-large cryptocurrency exchange to exit the market in recent years.

The official has stated that it will continue to process withdrawal requests, but all cases must undergo manual review, and a complete processing timeline has not been disclosed, nor has it indicated when all users will be able to complete their withdrawals. Future withdrawal progress, the platform's liquidity status, and whether more asset information will be disclosed will all be key points of ongoing market attention, which will also affect external evaluations of AscendEX's subsequent liquidation and asset return processes.