AscendEX has shut down operations after citing regulatory requirements under the European Union’s MiCA framework and mounting financial difficulties, while warning that some customers may not recover their full crypto balances.
Summary
- AscendEX has shut down operations, citing MiCA compliance requirements and financial difficulties.
- The exchange warned users that withdrawals will be reviewed manually and full account balances may not be recoverable.
- The closure follows weeks of withdrawal complaints after ZachXBT raised concerns about delayed withdrawals and the exchange’s visible hot wallet reserves.
According to a notice published by the cryptocurrency exchange on July 6, AscendEX ceased operations on July 1 after the Markets in Crypto-Assets (MiCA) regulation came fully into force in the European Union, where the platform does not hold the required authorization. The exchange said financial and operational pressures also contributed to the decision.
Alongside the shutdown, AscendEX said it cannot guarantee that customers will be able to withdraw all of the digital assets held in their accounts.
“We relied on an agreed strategic transaction that was to provide liquidity to grow the platform, and the counterparty did not perform,” the exchange said, adding that weak market conditions had added further strain. AscendEX said it is reviewing its financial position to determine what options, if any, remain available for account holders.
Withdrawals remain restricted
For now, the platform said account access has been limited to offboarding activities. Automated withdrawals have been suspended, while all withdrawal requests are undergoing manual review, which could result in delays.
The notice also stated that the exchange cannot provide assurances on either the timing or the amount customers may ultimately recover. It added that all requests will follow the same documented review process without preferential treatment for any group of users.
The announcement follows concerns raised in recent weeks by on-chain investigator ZachXBT.
As previously reported, he said users had reported withdrawals remaining pending for days or weeks, while his review of AscendEX’s publicly identified hot wallets found little to no holdings of major assets including ETH, USDT, USDC, and SOL. He noted, however, that exchange reserves can also include cold wallets, third-party custodians or addresses that are not publicly labelled.
A few days later, ZachXBT urged affected users to report the matter to law enforcement agencies and financial regulators in their jurisdictions. He also claimed the exchange had continued accepting deposits while many withdrawal requests remained unprocessed and said one large user had allegedly received no response from AscendEX co-founder George Jing Cao.
Founded in 2018 as BitMax before rebranding to AscendEX, the exchange previously suffered a security breach in 2021 that resulted in losses of about $78 million. The attack was later linked to the Lazarus Group.
Looking ahead, AscendEX said it will provide further updates once it has more clarity on its financial position. The exchange also warned that if formal insolvency or a similar legal process begins, unresolved customer balances and claims may be handled under those proceedings.
