Crypto exchange AscendEX announced the shutdown of its operations after facing a combination of regulatory, financial, and operational challenges. The company stated that it halted its activities on July 1 and acknowledged that it cannot guarantee when, or even if, users will be able to fully recover the assets held on the platform.
According to a statement released on July 6, one of the main factors behind the decision was the entry into force of the MiCA regulation in the European Union. The company said it is not authorized to operate under the new regulatory requirements, a situation that added to the financial difficulties it has faced in recent months.
AscendEX explained that customers can still access their accounts only for procedures related to the platform’s wind-down. However, automatic withdrawals have been suspended and all requests are being reviewed manually, which may cause significant delays.
"We were counting on an agreed strategic transaction that should provide liquidity for the platform’s growth, and the counterparty did not comply with the arrangement; broader market conditions in the cryptocurrency market increased the pressure even further," AscendEX wrote. "At present, we are assessing the company’s financial situation and considering which options, if any, may be available in relation to account holders."
The company also warned that there are no guarantees regarding the processing of withdrawal requests or the amounts that may be returned to customers. According to the exchange, all requests follow the same review procedure, with no preferential treatment for any group of users.
"We are not in a position to give guarantees about deadlines or amounts today," said the statement. "No account holder or group of account holders is receiving priority outside the documented review process."
The first signs of the crisis came even in the month prior to the official announcement. On-chain investigator ZachXBT said in his Telegram channel that he received multiple reports from users facing difficulties withdrawing cryptocurrencies for several days and, in some cases, for weeks.
In addition to the reports, ZachXBT said he analyzed the exchange’s online wallets and identified significantly reduced reserves of important assets, including ETH, USDT, USDC, and SOL. After the analysis, he recommended that affected customers file complaints with the relevant authorities and regulatory bodies in order to seek accountability for the platform.
Founded in 2018 under the name BitMax, AscendEX once ranked among the well-known cryptocurrency exchanges in the market. In 2021, the company also faced one of the most delicate episodes in its history after suffering a cyberattack that resulted in the loss of approximately US$ 78 million.
While assessing its financial situation, the company said it will disclose new information when there are decisions about the next steps. It also warned that if a formal insolvency process or similar procedure is initiated, the treatment of outstanding balances may be changed according to applicable rules.
"We expect to get back in touch with you with more details about the situation and the next steps as soon as we are able to do so," AscendEX said. "If any formal insolvency or similar process is initiated, the treatment of outstanding balances or credits may be subject to that process and new communications."