AscendEX Shuts Down as User Balance Payouts Remain Uncertain Brenda Mary | usagoldmines.com

• AscendEX shut down after MiCA pressure, weak liquidity, and failed funding left operations unsustainable.
• Users face delayed manual withdrawals, with the exchange unable to guarantee full balance recovery.
• ZachXBT had flagged nearly empty hot wallets before the shutdown, including ETH, USDT, USDC, and SOL.
• The closure revives custody concerns after AscendEX’s 2021 breach, which caused about $78M in losses.

AscendEX has shut down after regulatory, financial, and operational pressures pushed the crypto exchange into a controlled offboarding process. The platform ceased operations on July 1, then published a notice on July 6 explaining the decision.

The shutdown has left users facing uncertainty over whether they will recover their full crypto balances. The exchange said current liquidity problems may limit payouts, making withdrawals the central issue for affected customers.

MiCA Pressure And Failed Funding Trigger Closure

AscendEX linked its closure to the European Union’s Markets in Crypto-Assets framework, which came fully into force across the bloc. The platform said it did not hold the authorization required under MiCA, adding that regulatory pressure was only part of the problem.

Financial strain also played a major role. According to the exchange, a planned strategic transaction was expected to provide liquidity and support future growth. However, the counterparty failed to perform, leaving the business without expected funding.

The exchange also cited weak market conditions and operational pressure. Together, those factors forced the platform to stop normal services and begin reviewing its financial position.

That review now matters directly to users. AscendEX said it cannot guarantee that customers will receive all digital assets recorded in their accounts. It also said it cannot confirm the timing or size of any final recoveries.

The warning marks a sharp change from a standard exchange shutdown. Instead of simply closing services and processing withdrawals, the company is now assessing what assets remain available for distribution.

Manual Withdrawals Leave Users Facing Recovery Delays

User access has now been restricted to offboarding activities. Automated withdrawals have been suspended, while withdrawal requests are being reviewed manually.

That process could delay payouts further. The exchange said all claims will follow the same documented review process and that no group of users will receive preferential treatment.

Concerns, however, had already been growing before the notice. Last month, blockchain investigator ZachXBT said users had reported pending withdrawals lasting days or weeks. He also reviewed publicly identified hot wallets linked to the exchange.

According to his review, those hot wallets appeared to hold little or no balance in major assets, including ETH, USDT, USDC, and SOL. However, he also noted that exchange reserves may include cold wallets, third-party custodians, or addresses not publicly labeled.

Days later, ZachXBT urged affected users to report the matter to law enforcement agencies and financial regulators in their own jurisdictions. He also claimed the exchange continued accepting deposits while many withdrawals remained unprocessed.

He further alleged that one large user received no response from co-founder George Jing Cao. However, the company’s July 6 notice did not provide a specific recovery percentage for customers, leaving users with limited clarity on how much they may ultimately recover.

The uncertainty also adds to the exchange’s troubled history. AscendEX was founded in 2018 as BitMax before later rebranding, and it previously suffered a major security breach in 2021, when attackers stole about $78 million in crypto assets.

That attack was later linked to the Lazarus Group. Now, the platform’s closure has again placed user funds at the center of the story.

For affected customers, the immediate concern is recovery. For the wider market, the shutdown is another reminder that exchange account balances are not the same as direct asset control.

The post AscendEX Shuts Down as User Balance Payouts Remain Uncertain appeared first on Blockonomi.

This articles is written by : Nermeen Nabil Khear Abdelmalak

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