ZachXBT Sounds Alarm Over AscendEX as Users Struggle to Withdraw Funds

AscendEX says withdrawals will be handled manually, with no guarantees on processing times or payment amounts.

AscendEX said it stopped operating on July 1 after the MiCA transition period ended.

Following its exit, ZachXBT warned the public about the platform’s liquidity, alleging that it wouldn’t be able to process customer withdrawals.

ZachXBT Raises Fresh Liquidity Concerns

In its announcement, the crypto exchange said that it was winding down due to challenging market conditions and the European Union’s Markets in Crypto-Assets (MiCA) regulation, which left several crypto firms unable to operate in the region after failing to obtain the required authorization.

Following the decision, account access has been limited to offboarding processes, while automated withdrawals have been paused. The exchange said all withdrawal requests will now go through manual reviews and may be delayed, require additional information, or fail to be processed.

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

ZachXBT had previously shared on Telegram that several of the platform’s users were experiencing withdrawal delays for days or weeks, with some requests not being processed at all. The blockchain detective said his analysis found that AscendEX’s hot wallets had almost no reserves of major assets such as USDT, ETH, USDC, and SOL, leading him to believe that it was facing liquidity challenges.

Community reports corroborated the situation, with many individuals who had tried to move funds out of the exchange saying their transactions had been stuck in “initiating” for over a week. In a follow-up post, ZachXBT claimed that the platform has yet to process over 7 figures worth of transactions for its users.

He also urged the affected to take legal action by filing police reports and speaking to the relevant regulators in their countries to hold the platform accountable.

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AscendEX Confirms Financial Issues

The exchange, founded in 2018 by George (Jing) Cao, was once a major crypto platform. However, AscendEX fell victim to a hack in December 2021 that drained about $78 million in digital assets.

In its statement, the firm said that its decision to shut down was heavily influenced by financial and operational issues, explaining that a strategic transaction meant to provide liquidity had failed. It added that market conditions had also contributed to the pressure, causing the company to assess its financial position and all available options for account holders.

The firm concluded by advising users to forward any complaints through its official channels and said that it would notify them of any next steps should insolvency proceedings be initiated.