Author: Maher, Foresight News

On July 6, the exchange AscendEX officially confirmed the suspension of operations. The platform's official website issued a letter to users on July 6, clarifying that it will cease operations from July 1, 2026, due to the full effect of the European Union's "Crypto Asset Market Regulation" (MiCA) and multiple factors such as market, finance, and operations. Users are no longer able to open an account, recharge, trade, exchange, pledge, lend or participate in any activities, and the account only retains limited exit purposes.

On-chain investigator ZachXBT responded immediately after the announcement, pointing out that the AscendEX public hot wallet currently lacks sufficient liquidity to handle several verified seven-figure (millions of dollars) user withdrawal requests. In the past few weeks, ZachXBT has repeatedly publicly warned about the platform's withdrawal delays. It analyzed its hot wallet data through tools such as Arkham Intelligence and TRM Labs and found a serious shortage of highly liquid assets (such as ETH, USDT, and SOL).

ZachXBT explicitly advises the community not to deposit funds into this CEX and asks the platform to respond to withdrawal delays and hot wallet liquidity issues.

The AscendEX platform announcement stated, "Effective July 6, 2026, all withdrawal requests will be subject to manual review before being processed, and automatic withdrawals have been suspended. Withdrawals may be delayed, may require additional information, or may not be processed while the review continues. We cannot currently guarantee processing times or amounts. No account holder or group of account holders is given priority other than a documented review process."

The author discovered through the Arkham chain that there are very few funds that can be withdrawn from its wallet address. In the past two days, except for tens of thousands of dollars in BTC, all other withdrawals were small amounts, and they occurred a week ago.

As of now, one of the flagged wallets has only $13.46 million in altcoins left.

It is worth mentioning that the exchange originally expected to introduce liquidity through strategic mergers and acquisitions or restructuring, but it ultimately failed. As of now, there have been no new official updates releasing further repayment plans or financial details.

Predecessor BitMax

AscendEX’s official website shows that its predecessor was BitMax.io, which was officially launched in August 2018. The co-founder and CEO is Cao Jing, and the chief operating officer is Ariel Ling. Cao Jing has a background in quantitative trading and venture capital, and has built quantitative platforms in the financial market; Ariel Ling has worked in institutions such as Deutsche Bank and Barclays.

During 2019-2020, BitMax rose rapidly in the crypto bull market. In March 2021, the platform completed its name change to AscendEX and completed a US$50 million Series B financing in the same year, led by Polychain Capital and Hack VC.

However, in December 2021, a major security incident disrupted the stability. Attackers exploited the AscendEX hot wallet vulnerability and stole approximately US$77.7 million in assets across Ethereum, BNB Chain, Polygon and other chains (PeckShield and other institutions estimate approximately US$80 million). The platform quickly confirmed the unauthorized transactions and promised to compensate users for their losses with its own funds. The incident became one of many exchange hacking attacks that year, and also exposed the inherent risks of hot wallets in daily liquidity management.

Since then, AscendEX has continued to operate, but the industry environment has changed profoundly. Stricter global regulations, intensified competition, and cyclical fluctuations in the crypto market are gradually accumulating pressure. It was not until mid-2026 that the problems began to escalate.

The exchange is undergoing a purge

As an independent on-chain detective, ZachXBT’s methodology relies on public blockchain data and professional tools (such as Arkham, TRM) rather than inside information or rumors. This makes its early warning highly verifiable.

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

In community discussions, some voices mentioned that AscendEX was once described as a "mom-and-pop shop" operation (George Cao was married to someone related to finance). This incident once again highlighted the inherent risks of centralized exchanges: even if there is no hacker attack, liquidity management imbalances, regulatory compliance lags, and deep bear pressure may trigger a run crisis. The hot wallet theft incident in 2021 echoes the liquidity shortage problem in 2026 - hot wallets are designed for daily operations, but they often become the focus of dual pressures on liquidity and security.

In addition, the exchange has also been questioned for leaving the blame for ceasing operations to supervision. AscendEX has never obtained any compliance authorization from the EU, and whether MiCA takes effect or not will not affect its original operating model at all. It is just taking advantage of the industry trend of compliance to find a decent, force majeure-style "end of life" excuse.

Some crypto exchanges have experienced a major purge since the wild growth of DeFi in 2020-2021. For the industry, small and medium-sized platforms are facing pressure to exit or reorganize, while platforms with transparent reserve certificates, strong regulatory licenses and robust risk control are more resilient. For users, placing crypto assets in non-custodial wallets or exchanges that publish transparent reserves as much as possible may be the way to prevent risks.