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Ahmed Barakat
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AscendEX has ceased all operations effective July 1, 2026, and told users it cannot guarantee full recovery of their balances, raising serious concerns about the exchange’s liquidity. The exchange published its official notice on July 6, five days after halting operations, citing MiCA compliance requirements, a failed strategic transaction, and deteriorating market conditions as the main reasons behind the crypto exchange shutdown.
The July 6 notice outlined the exchange’s financial challenges in unusually direct language. “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 said. The exchange added that it is assessing available options for account holders while cautioning that it cannot guarantee withdrawal timing or recovery amounts.
MiCA also played a role in the decision. The EU’s Markets in Crypto-Assets regulation came fully into effect on July 1, and AscendEX does not hold authorization under that framework. However, the exchange also pointed to financial and operational pressures, suggesting multiple factors contributed to its closure rather than regulation alone.
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ZachXBT Flagged Empty Hot Wallets Nine Days Before the Announcement
On-chain investigator ZachXBT publicly raised concerns on June 26 after receiving multiple reports of delayed withdrawals from AscendEX users. His review of the exchange’s publicly labeled hot wallet addresses found very low balances across ETH, USDT, USDC, and SOL.
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According to reports citing ZachXBT’s Telegram postthe exchange’s hot wallets appeared insufficient to cover multiple seven figure withdrawal requests reported by users. He advised affected customers to file reports with financial regulators and law enforcement in their jurisdictions and warned against depositing additional funds.
AscendEX has since suspended automated withdrawals, with all requests now subject to manual review. The exchange also stated, “We are not in a position to give assurances about timing or amounts today. No account holder or group of account holders is being given priority outside the documented review process.”
A Platform With a Prior Hack and a History as BitMax
AscendEX launched in 2018 as BitMax before rebranding in March 2021. Later that year, the exchange suffered a $78 million hot wallet hack that blockchain security firms attributed to North Korea’s Lazarus Group.
At the time, AscendEX said it would fully reimburse affected users. That response stands in contrast to its current position, where it says it cannot guarantee the timing or amount of any asset recovery. The scale of the current shortfall remains unclear.
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What Comes Next for AscendEX Users
The next major development will be whether AscendEX enters a formal insolvency process. Its July 6 notice states, “If any formal insolvency or similar process is commenced, the treatment of unresolved balances or claims may be subject to that process.” While no such proceeding has been announced, the exchange has acknowledged that possibility.
Users with funds on the platform should preserve account records and withdrawal requests. Following ZachXBT’s recommendation, affected customers may also consider reporting their cases to financial regulators and law enforcement in their jurisdictions. For now, withdrawals remain under manual review, and AscendEX has not provided a timetable for resolving outstanding claims.
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