AscendEX crypto exchange shuts down, no assurance on user payouts

Crypto exchange AscendEX announced that it has shuttered operations effective July 1, citing regulatory pressures and financial challenges.

In an official notice dated July 6, the exchange stated that the decision stemmed from a combination of factors, including the full implementation of the European Union's MiCA on July 1, for which AscendEX does not hold authorization. Other financial and operational issues affected the platform.

The exchange also indicated that existing users may not be able to withdraw the full crypto balances they held on the platform.

"We relied on an agreed strategic transaction that was to provide liquidity to grow the platform, and the counterparty did not perform; wider crypto market conditions have added further pressure," AscendEX wrote. "We are currently assessing the company's financial position and considering what options, if any, may be available in relation to account holders."

AscendEX noted that account access is restricted to limited offboarding purposes, and automated withdrawals have been paused. Withdrawal requests are subject to manual review, and therefore could be delayed, the exchange said. 

"We are not in a position to give assurances about timing or amounts today," the notice said. "No account holder or group of account holders is being given priority outside the documented review process."

Liquidity crunch

Last month, onchain investigator ZachXBT flagged on Telegram that he observed multiple reports of AscendEX delaying withdrawals for days or weeks. ZachXBT said his analysis of the platform's hot wallets showed nearly empty reserves of major assets such as ETH, USDT, USDC, and SOL.

In follow-up messages, ZachXBT recommended that users file reports with law enforcement and regulatory agencies to hold the platform accountable.

Founded in 2018 originally as BitMax, AscendEX had previously suffered a significant hack in 2021, losing approximately $78 million.

"We expect to write to you again with further detail on the position and on next steps as and when we are in a position to do so," AscendEX said. "If any formal insolvency or similar process is commenced, the treatment of unresolved balances or claims may be subject to that process and to further communications."