AscendEX halts operations as EU MiCA rules bite; users warned they may not recover full balances
AscendEX has shut down trading and limited account access after saying it could not meet new regulatory requirements under the European Union’s Markets in Crypto‑Assets (MiCA) framework and was facing mounting financial strain. In a notice published July 6, the exchange said it ceased operations on July 1 because it does not hold the authorization now required in the EU — and added that operational and liquidity pressures contributed to the decision.
Key points
- Date & reason: AscendEX stopped operations July 1; the exchange cited the full entry into force of MiCA in the EU and a lack of the required authorization, along with financial and operational difficulties.
- Withdrawal uncertainty: The platform warned customers that they may not be able to withdraw all digital assets held on the exchange. Automated withdrawals have been suspended; all withdrawal requests are being processed manually and could face delays.
- Liquidity issues: AscendEX said it had been counting on a strategic transaction to provide liquidity, but “the counterparty did not perform,” and poor market conditions exacerbated the situation.
- No guarantees: The company said it cannot assure customers about the timing or amount of any recoveries and is reviewing its financial position to determine options. It also pledged that withdrawal reviews will follow the same documented process with no preferential treatment.
- Potential insolvency: AscendEX warned that if formal insolvency or a similar legal process is initiated, unresolved customer balances and claims may be handled according to those proceedings.
Investigator warnings and user reports
On‑chain investigator ZachXBT had raised red flags in recent weeks, reporting user complaints of withdrawals pending for days or weeks. His analysis of AscendEX’s publicly identified hot wallets reportedly showed little to no holdings of major assets such as ETH, USDT, USDC and SOL — though he noted exchange reserves can also be held in cold wallets, third‑party custodians, or unlabeled addresses. ZachXBT urged affected users to report the situation to law enforcement and their financial regulators, and alleged the exchange continued accepting deposits while many withdrawal requests remained unprocessed. He also said one large user reportedly had not received a response from AscendEX co‑founder George Jing Cao.
Background
AscendEX launched in 2018 as BitMax and later rebranded. The exchange previously suffered a major security breach in 2021 that resulted in roughly $78 million in losses; that incident was later linked to the Lazarus Group.
What’s next
AscendEX said it will provide further updates as it gains clarity on its finances. Meanwhile, customers should prepare for the possibility of protracted manual reviews and for outcomes that may include partial recoveries or formal insolvency proceedings. Crypto holders affected by blocked withdrawals should document their claims and consider reporting to local regulators and law enforcement, as recommended by on‑chain investigators.
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