Written by: Ma He, Foresight News
On July 6, the exchange AscendEX officially confirmed that it has ceased operations. The platform's official website published a letter to users on July 6, clearly stating that all business will be completely terminated starting July 1, 2026, due to the full effect of the EU's Markets in Crypto-Assets Regulation (MiCA) and multiple factors including market, financial, and operational influences. Users can no longer open accounts, deposit funds, trade, exchange, stake, borrow, or participate in any activities. Accounts are now limited to withdrawal purposes only.
On-chain investigator ZachXBT responded immediately after the announcement was released, pointing out that AscendEX's publicly known hot wallet currently lacks sufficient liquid assets to process several verified user withdrawal requests in the seven-figure range (amounting to millions of USD). For several weeks prior, ZachXBT had repeatedly publicly warned about the platform's withdrawal delays. Using tools like Arkham Intelligence and TRM Labs to analyze its hot wallet data, he discovered a severe shortage of high-liquidity assets such as ETH, USDT, and SOL.
ZachXBT explicitly advised the community not to deposit funds into this CEX and demanded that the platform respond to the withdrawal delays and hot wallet liquidity issues.
In its announcement, AscendEX stated, "Starting July 6, 2026, all withdrawal requests will be subject to manual review before processing. Automatic withdrawals have been suspended. Withdrawals may be delayed, may require additional information, or may not be processed while the review is ongoing. We cannot currently guarantee processing times or amounts. Beyond the documented review process, no account holder or group of account holders is being given priority."
The author observed on Arkham's on-chain platform that the funds available for withdrawal in its wallet addresses are currently extremely limited. In the past two days, aside from withdrawing tens of thousands of dollars worth of BTC, all other withdrawals have been small amounts and occurred a week ago.
As of now, one of its marked wallets only contains $13.46 million worth of altcoins.
It is worth mentioning that the exchange had initially hoped to introduce liquidity through strategic mergers, acquisitions, or restructuring, but ultimately failed. As of now, no further official updates have been released regarding further repayment plans or financial details.
Formerly BitMax
AscendEX's official website indicates that its predecessor was BitMax.io, which officially launched in August 2018. Its co-founder and CEO is George Cao, and the COO is Ariel Ling. George Cao has a background in quantitative trading and venture capital, having previously built quantitative platforms in financial markets. Ariel Ling has worked at institutions such as Deutsche Bank and Barclays.
During the 2019-2020 period, BitMax quickly rose to prominence in the crypto bull market. In March 2021, the platform rebranded to AscendEX. In the same year, it completed a $50 million Series B funding round led by Polychain Capital and Hack VC.
However, in December 2021, a major security incident disrupted this stability. Attackers exploited a vulnerability in AscendEX's hot wallet, stealing approximately $77.7 million in assets across chains including Ethereum, BNB Chain, and Polygon (estimates from firms like PeckShield put the figure around $80 million). The platform quickly confirmed the unauthorized transactions and promised to cover user losses with its own funds. This incident became one of several exchange hacks that year, also exposing the inherent risks of hot wallets in daily liquidity management.
Following this, AscendEX continued operations, but the industry environment had undergone profound changes. Increasingly stringent global regulations, intensified competition, and volatile crypto market cycles gradually accumulated pressure. This culminated in a concentrated outbreak of problems in mid-2026.
Exchanges Face a Shakeout
ZachXBT, as an independent on-chain detective, relies on publicly available blockchain data and professional tools (like Arkham, TRM) rather than insider information or rumors. This makes his warnings highly verifiable.
In the AscendEX incident, he pointed out liquidity risks several days in advance. He continued to track the hot wallet status even after the platform's announcement, emphasizing "verified multiple seven-figure user withdrawal requests."
In community discussions, some voices mentioned that AscendEX has been described as a "mom-and-pop shop" style of operation (George Cao is reportedly married to a financial personnel). This event once again highlights the inherent risks of centralized exchanges: even in the absence of hacking attacks, mismanagement of liquidity, lagging regulatory compliance, and pressures from a deep bear market can all trigger a bank-run style crisis. The 2021 hot wallet theft and the 2026 liquidity shortage issue echo each other—hot wallets are designed for daily operations but often become the focal point of dual pressures from liquidity and security.
Furthermore, the exchange's attempt to shift blame for ceasing operations to regulation is widely questioned. AscendEX never obtained any regulatory authorization from the EU, so the implementation of MiCA fundamentally does not affect its original operating model. It is merely using the industry trend of compliance implementation as a respectable, force majeure-style excuse for a "dignified end."
A major shakeout is underway for some crypto exchanges since the wild growth of DeFi in 2020-2021. For the industry, small and medium-sized platforms face pressure to exit or restructure, while platforms with transparent proof of reserves, strong regulatory licenses, and robust risk controls demonstrate greater resilience. For users, perhaps the way to guard against risks is to keep crypto assets in non-custodial wallets or on exchanges with publicly disclosed, transparent reserves.
