The user's automatic withdrawals have been suspended. Withdrawals may be delayed, may require additional information, or may not be processed during the review period.

Written by: Ma He, Foresight News

On July 6, the exchange AscendEX officially confirmed the cessation of operations, and the official website released a letter to users on July 6, clearly stating that all business operations will be completely stopped from July 1, 2026, due to the full implementation of the EU's Regulation on Crypto-Asset Markets (MiCA) and multiple factors including market, financial, and operational issues. Users can no longer open accounts, deposit, trade, exchange, stake, borrow, or participate in any activities; accounts will only retain limited capabilities for withdrawal purposes.

On the same day the announcement was released, on-chain investigator ZachXBT immediately responded, noting that AscendEX's public hot wallet currently lacks sufficient liquid assets to process several verified multiple seven-figure (multi-million dollar) user withdrawal requests. In the previous weeks, ZachXBT had repeatedly issued public warnings regarding the withdrawal delay issues on the platform, analyzing its hot wallet data through tools such as Arkham Intelligence and TRM Labs, and found a severe shortage of highly liquid assets (such as ETH, USDT, SOL).

ZachXBT clearly advised the community not to deposit to this centralized exchange (CEX) and called for a response from the platform on the withdrawal delays and hot wallet liquidity issues.

The AscendEX platform announcement stated, "From July 6, 2026, all withdrawal requests will require manual review before processing; automatic withdrawals have been suspended. Withdrawals may be delayed, may require additional information, or may not be processed during the review period. We cannot currently guarantee processing times or amounts. No account holders or groups of account holders are given priority beyond the documented review process."

The author discovered through Arkham on-chain that its wallet address currently has very little funds available for withdrawal. In the past 2 days, apart from a withdrawal of several tens of thousands of USD in BTC, all other transactions were small withdrawals, occurring one week ago.

As of now, a certain marked wallet only has 13.46 million USD in altcoins left.

It is worth mentioning that the exchange originally hoped to bring in liquidity through strategic mergers or restructuring but ultimately failed. So far, there have been no new official updates released regarding further repayment plans or financial details.

Formerly BitMax

The official website of AscendEX shows that it was formerly launched as BitMax.io in August 2018, with co-founder and CEO George Cao, and Ariel Ling as the Chief Operating Officer. George Cao has a background in quantitative trading and venture capital and has built a quantitative platform in financial markets; Ariel Ling has previously worked at institutions such as Deutsche Bank and Barclays.

Between 2019 and 2020, BitMax rapidly rose during the crypto bull market. In March 2021, the platform rebranded to AscendEX and completed a Series B funding round of 50 million USD in the same year, led by Polychain Capital and Hack VC.

However, in December 2021, a major security incident disrupted the stability. Attackers exploited vulnerabilities in AscendEX's hot wallet, stealing approximately 77 million USD of assets across Ethereum, BNB Chain, Polygon, and other chains (estimates by PeckShield and others place the figure around 80 million USD). The platform quickly confirmed unauthorized transactions and promised to compensate users for their losses using its own funds. This incident became one of many exchange hacks that year and exposed the inherent risks of hot wallets in daily liquidity management.

Afterward, AscendEX continued operations, but the industry environment underwent profound changes. Global regulation tightened, competition intensified, and the fluctuations in the crypto market cycle gradually accumulated pressure. By mid-2026, problems erupted collectively.

Exchanges Face Cleanup

ZachXBT, as an independent on-chain investigator, relies on public blockchain data and professional tools (such as Arkham, TRM) rather than internal information or rumors for his methodology. This grants his warnings strong verifiability.

In the AscendEX incident, he pointed out liquidity risks several days in advance and continued to track hot wallet status after the platform announcement, emphasizing "multiple verified seven-digit user withdrawal requests."

In community discussions, some voices mentioned that AscendEX had been described as a "family-run operation" (George Cao and a finance-related staff member have a marital relationship), and this incident highlights the inherent risks of centralized exchanges: even without hacking, imbalances in liquidity management, delayed regulatory compliance, and extreme bearish pressure can trigger a bank run-like crisis. The hot wallet theft incident in 2021 and the liquidity shortage issue in 2026 resonate with each other—hot wallets, originally designed for daily operations, often become the focus of dual pressures of liquidity and security.

Moreover, the exchange throwing the blame for ceasing operations onto regulation is also met with skepticism. AscendEX has never obtained any compliance authorization from the EU, and the effectiveness of MiCA does not affect its original operational model. It is merely using the momentum of regulatory landing in the industry to find a decent, force majeure-style excuse for its "natural death."

After the savage growth of DeFi from 2020 to 2021, some crypto exchanges faced a major cleanup; medium and small platforms face exit or restructuring pressures, while those with transparent reserve proofs, strong regulatory licenses, and robust risk control are more resilient. For users, placing crypto assets in non-custodial wallets or exchanges with transparent reserves may be a way to safeguard against risks.