Less than a week before AscendEX sent its formal shutdown notice to customers, blockchain investigator ZachXBT had already raised a public alarm. On June 26, ZachXBT flagged on Telegram that he had observed multiple reports of withdrawal delays on the platform alongside hot wallet data that showed near-empty reserves of major assets including ETH, USDT, USDC, and SOL. ZachXBT recommended that users file reports with law enforcement and regulatory agencies.
On July 6, AscendEX confirmed what that on-chain data had suggested. The exchange told retail account holders it had ceased operations effective July 1, 2026. Automated withdrawals were suspended the same day. Every remaining withdrawal request is now subject to manual review before processing.
What the exchange said about why it closed
The official July 6 notice attributed the shutdown to two connected developments. The first was the European Union's Markets in Crypto-Assets regulation, which took full effect on July 1, 2026, and under which AscendEX does not hold authorization. The second was the collapse of a liquidity deal the exchange had structured to sustain the platform.
"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 wrote.
The exchange said it is now reviewing its financial position.
"We are currently assessing the company's financial position and considering what options, if any, may be available in relation to account holders," the notice stated.
That review has produced no guarantees for users.
"We are not in a position to give assurances about timing or amounts today," the notice said. "No account holder or group of account holders is being given priority outside the documented review process."
The withdrawal process users now face
Under the manual review framework, withdrawal requests can be delayed, may require additional documentation, or may not proceed while the review continues. The exchange said requests will only be processed where applicable legal requirements are met, including KYC and AML compliance and asset reconciliation.
Account access has been restricted to offboarding purposes only. The platform no longer accepts new deposits or processes trades. The exchange told users to update their KYC information and download transaction history before access ends.
Some users have reported being unable to obtain transaction IDs for pending withdrawal requests. Without those IDs, they have no documentation of their pending positions and no clear path to confirmation.
A platform with prior losses before the closure
AscendEX launched in 2018 under the name BitMax and rebranded to its current name in 2021. In December of that year, the exchange suffered a hack that drained approximately $78 million from its hot wallets. The breach was later attributed to the Lazarus Group, a North Korea-linked state-sponsored hacking operation. Months before that hack, the exchange had closed a $50 million Series B funding round led by Polychain Capital and Hack VC, capital that had been intended to expand the platform's services.
The 2021 breach and years of subsequent market pressure now form the backdrop to a shutdown notice that explicitly references possible formal insolvency proceedings.
What the notice leaves open on formal insolvency
AscendEX did not announce formal insolvency in the July 6 letter but left the door open.
"If any formal insolvency or similar process is commenced, the treatment of unresolved balances or claims may be subject to that process and to further communications," the notice stated.
The exchange told customers it expects to communicate again with further detail on next steps "as and when we are in a position to do so." No timeline was offered for that update.
MiCA was designed to establish licensing standards for exchanges that serve European customers. AscendEX failed to obtain authorization under that framework before it came into force. The exchange ceased operations on the same date the regulation took full effect.
Kristian Koch
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