Key Insights
- ZachXBT pointed out the reports of delayed withdrawals of AscendEX and raised doubts about the liquidity of the exchange.
- The amount of ETH, USDT, and SOL in popular hot wallets was relatively small on-chain.
- Centralized exchanges will be under increased pressure to increase transparency of their reserves and communication with users.
Cryptocurrency exchange AscendEX has faced complaints from several users who experienced delays in their crypto withdrawals up to a few days and in some cases even weeks.
Several users have complained about the time taken to withdraw crypto from AscendEX, which has been up to a few days and in some cases even weeks. As confidence in centralized exchanges is shaky in the crypto market, the warning has brought into sharp focus such platforms’ reserve transparency and withdrawal mechanisms.
On June 26, the blockchain investigator released the alert by analyzing AscendEX addresses and gathering reports from users who reported that their withdrawal requests were not processed. The concerns arose as market participants became more vocal in requesting evidence that exchanges are able to process customer redemption requests without disruption.
In response to user complaints, new questions are raised.
All the new issues surfaced when users from social media platforms and online forums experienced withdrawal issues using AscendEX that was previously known as BitMax.
All the recent issues came from the fact that users all over social media platforms and forums had problems withdrawing funds from BitMax or AscendEX. Some users reported that their transactions were stuck in processing for a long time, while some others reported that their transactions did not go beyond the initiation process for withdrawal.
Rarely, some users have reported waiting several days or weeks for their assets, according to ZachXBT. In a few instances, users reported that the platform took money from their balance, but did not produce blockchain transaction IDs.
According to the support documents of AscendEX, completed withdrawals should be provided with a transaction identifier after the exchange broadcast the transaction to the blockchain network. The company also recommends that if there is no transaction ID after 2 hours of a transaction request been submitted, the users should reach out to them for further assistance.
Wait times for updates on delayed transfers, however, were reported as being limited and community members were given limited assistance during their wait.
AscendEX at a Glance
On-chain review raises liquidity questions
After examining AscendEX’s known wallets through Arkham and TRM, ZachXBT reported that visible hot wallet balances appeared to hold limited amounts of major cryptocurrencies.
The investigator pointed specifically to lower-than-expected holdings of ETH, USDT, and SOL. He also shared wallet addresses across EVM, Tron, and Solana networks that formed part of his review.
Based on the results, he doubted whether AscendEX has sufficient available liquidity to meet withdrawal requests at this moment. Hot wallet balances are a type of exchange reserves but may not reflect the total holdings. Exchanges may keep large amounts of assets in cold wallets or with a third-party custodian.
Nevertheless, a long delay in the withdrawal process can catch the eye since it may be a sign of problems in operations, a lack of liquidity or an internal processing problem.
In a follow-up post, ZachXBT publicly asked AscendEX to explain the reported withdrawal problems and clarify why visible wallet balances appeared limited. The exchange had not issued a detailed response to those questions at publication time.
Pressure mounts for transparency across exchanges
The AscendEX situation comes as the wider industry struggles with concerns over reserve reporting and liquidity verification. Several exchange failures over recent years have increased demand for transparency around customer assets and withdrawal capacity.
This month, ZachXBT also questioned reserve claims at another exchange, JuCoin, after users reported withdrawal issues. Those concerns centered on whether publicly reported reserves consisted of liquid assets that users could access immediately.
The latest AscendEX allegations have revived a familiar debate within the cryptocurrency industry. Users are looking for evidence of exchanges’ ability to withdraw funds on a timely basis.
- Investors are more keen on on-chain reserve data.
- Trading platforms have come to rely on transparency as a competitive edge.
- Withdrawal delays may lead to any type of worry no matter how the withdrawal happened.
- Additionally, AscendEX is being scrutinized again due to its security issues in the past.
The hackers affiliated with the North Korean Lazarus Group were responsible for the theft of around $78 million from the platform in December 2021. While that incident may have nothing to do with the ongoing withdrawals, it’s still lingered in the minds of the people operating the exchange.
In the meantime, ZachXBT took the topic up a notch by posting a sarcastic comment on executive spending as users are increasingly frustrated to get answers.
Conclusion
The AscendEX controversy continues without any evidence of insolvency yet. But the news of slow pull-outs paired with doubts about the apparent withdrawals has put pressure on the exchange to offer more transparency. While users await clarification, the warning from ZachXBT serves as yet another reminder that trust, liquidity and clear communication are key pillars of the centralized exchange business.
