Headline: AscendEX halts operations amid MiCA compliance issues and liquidity shortfall — users warned they may not recover full balances
AscendEX has abruptly suspended trading and withdrawal services, saying the platform ceased operations on July 1 and announced the move in a July 6 notice. The exchange blamed the EU’s newly enforced Markets in Crypto-Assets (MiCA) rules — for which AscendEX says it does not hold the required authorization — alongside mounting financial and operational pressures.
Key points
- The exchange warned it “cannot guarantee that customers will be able to withdraw all of the digital assets held in their accounts.”
- AscendEX said a planned strategic transaction that would have provided liquidity “did not perform,” and that weak market conditions further strained the business.
- Account access has been limited to offboarding activities. Automated withdrawals are suspended; withdrawal requests are being processed manually and may face significant delays.
- The company said it is reviewing its financial position and will report back once it has clarity, but cautioned that if formal insolvency or similar legal proceedings start, unresolved customer claims could be handled through those processes.
On-chain investigator raises red flags
Independent investigator ZachXBT had flagged withdrawal problems in recent weeks, reporting users with pending withdrawals lasting days or weeks. His public look at AscendEX’s hot wallets allegedly showed minimal holdings of major tokens such as ETH, USDT, USDC and SOL — though he acknowledged that exchanges can also rely on cold wallets, third-party custodians or unlabeled addresses for reserves. ZachXBT urged affected customers to report the situation to law enforcement and financial regulators and claimed the platform continued to accept deposits while many withdrawals stayed unprocessed. He also said one large user received no reply from 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 led to roughly $78 million in losses; that attack was later linked to the Lazarus Group.
What users should do now
- Do not deposit new funds to AscendEX.
- Save all account records, communications and transaction receipts.
- Monitor official AscendEX communications for updates and consider filing reports with local law enforcement and financial regulators, as investigators have recommended.
- If you have large or unresolved balances, consider seeking legal advice about protections available in your jurisdiction.
AscendEX said it will provide further updates once its financial position is clearer but gave no timetable or assurances on the timing or amount customers might recover. The evolving situation underscores the sector-wide consequences of regulatory shifts and liquidity stress for centralized crypto platforms.
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