AscendEX Collapses After Depleting Liquidity Pool And Blames MiCA For It

• Singapore-headquartered AscendEX has shuttered its operations since July 1 and is reportedly no longer responding to customer claims.
• The company blamed market, financial, operational, and regulatory headwinds for its closure.
• It even said that its failure to get MiCA authorization significantly contributed to the matter.

AscendEX posted a notice on its official website on Monday informing customers that it shut down its operations as early as July 1. It follows a popular crypto sleuth’s investigation, which detected massive outflows from the Singapore-headquartered platform.

What AscendEX Does

AscendEX originally debuted as BitMax in July 2018. In March 2021, it officially rebranded to its present name.

The startup marketed itself as a crypto and digital asset platform for professional and retail traders. It’s also known as Dingfeng to Chinese customers.

Additionally, the exchange launched BitMax Token (BTMX) as its native token. However, its run was short-lived, with its trading activity ceasing in June 2021.

Eight years after its launch, or five years under its present name, it all fell apart.

AscendEX’s Collapse

The pseudonymous ZachXBT, a popular crypto investigator, exposed several complaints piling up from AscendEX users around June 26. Most of the issues stemmed from the exchange purportedly delaying customer withdrawals for weeks or not processing them at all.

Digging deeper into its EVM (Ethereum Virtual Machine), Solana (SOL), and Tron (TRX) hot wallets, the crypto sleuth found that AscendEX was experiencing liquidity issues in its large-cap tokens. Its major assets include Ethereum (ETH), Tether (USDT), and Solana.

Even before the exposé, AscendEX’s social media account on X had already gone silent. Its last tweet on June 23 was only to promote the Nusa Token’s (NST) listing on its platform. By July 2, ZachXBT revealed that he had reviewed a case involving a “large victim” who escalated his concern to co-founder George (Jing) Cao. The victim claimed that neither the co-founder nor any member of the AscendEX team reached out to him. During that time, the crypto investigator urged victims to elevate their complaints with law enforcement authorities.

Fast-forward to July 8, and ZachXBT confirmed the worst. He found that AscendEX has depleted its wallets and that it can no longer process withdrawals.

Blaming MiCA

North Korea-linked Lazarus Group notably hacked AscendEX for $77 million in December 2021. Nonetheless, it was able to sustain its operations after the incident, assuring users it would reimburse their losses.

In a notice dated June 6, AscenDEX alerted customers that it closed its business on July 1. It cited financial, operational, and regulatory headwinds as key reasons for its decision.

Furthermore, it blamed the European Union’s full enforcement of the Markets in Crypto-Assets (MiCA) Regulations for its closure, as it failed to secure authorization before the end of its grace period for crypto exchanges on June 30.

AscendEX advised affected customers to submit their claims or concerns via its customer support at support@ascendex.com. The company ensured it would explore options to repay account holders and that its communication lines would remain open to them. That’s despite several users already raising concerns over the business’s unresponsiveness to their emails.

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