AscendEX halted operations as of 1 July 2026 because the crypto exchange failed to secure a licence under the EU's MiCA regulation. According to the official notice of 6 July, users therefore receive no guarantee on the timing or full amount of their payout.
AscendEX is a centralised crypto trading platform that let retail and corporate clients trade, swap, stake and lend digital assets. As a centralised exchange, the company held customer funds itself, unlike a decentralised platform where users keep control over their balances. MiCA (Markets in Crypto-Assets) is the EU's unified rulebook for crypto services. Under that rulebook, such providers therefore need full authorisation as a Crypto-Asset Service Provider to keep serving EU customers. George Cao founded the platform in 2018 as BitMax, and since March 2021 it has operated under the name AscendEX. Back in late 2021, the exchange suffered a hack of roughly USD 77.7 million. The losses split across roughly USD 60 million in Ethereum, USD 9.2 million on the BNB Smart Chain and USD 8.5 million on Polygon. The company later compensated everyone affected in full from its own funds. Now the exchange is shutting down entirely.
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Missing MiCA licence ends AscendEX operations
With the shutdown, customers can no longer open new accounts as of 1 July 2026. Deposits, trading, swaps, staking and lending have also stopped, as has participation in referral and promotional campaigns. Existing balances remain on accounts for now, without users being able to access them freely. Officially, the exchange attributes the move to the lack of a MiCA licence. It also points to broader regulatory, financial and operational circumstances.
Legally, AscendEX invokes Article 143(3) of the MiCA regulation, which governed the transition period for already active providers. This window let incumbent providers continue operating until the deadline without final authorisation. It ended on 1 July 2026. Without full authorisation as a Crypto-Asset Service Provider, a provider can no longer serve EU customers. As a result, the exchange lost the legal basis for its European business.
Alongside the regulatory pressure, the company cites a failed funding attempt. AscendEX says it had first counted on a coordinated strategic deal meant to bring fresh liquidity for further development. However, the counterparty did not meet its obligations. That removed a central pillar of the recovery plan. The exchange also signalled that it might open a formal insolvency proceeding. Such a proceeding would then have a court order the distribution of remaining assets to creditors.
ZachXBT warned early about empty wallets
The liquidity problems came as no surprise. Back on 26 June 2026, on-chain investigator ZachXBT publicly warned about the exchange's near-empty hot wallets. He is one of the best-known names for uncovering crypto fraud. Hot wallets are the permanently online stores from which an exchange handles its ongoing payouts. This mainly affected the large assets ETH, USDT, USDC and SOL. At the same time, users reported delayed or incomplete payouts. To date, AscendEX has not publicly confirmed these figures.
Data from Arkham Intelligence backed up the finding. The analytics service evaluates publicly visible blockchain movements. According to it, addresses tied to AscendEX held roughly USD 13.5 million. Of that, more than USD 12 million sat in the exchange's own ASD and UNITE tokens. Both tokens are barely tradable. As a result, almost no usable reserves stood ready for payouts in common cryptocurrencies. Whether additional funds sit in cold storage or with third-party custodians, however, cannot be publicly verified.
The reserve base had already shrunk noticeably beforehand. On 20 June 2026, reserves fell by roughly USD 240 million. Just under two months earlier, a liquidity injection of a similar size had taken place. The outflow substantially reduced the available coverage shortly before the shutdown. On 2 July, ZachXBT reaffirmed that payouts were still not being processed, while deposits technically remained possible.
I recommend your team answers the following questions for the community:
1) Why are AscendEX users reporting delayed or incomplete withdrawals?
2) Why do the AscendEX hot wallets currently not have any liquid assets?
No one should deposit funds to this CEX. pic.twitter.com/tXDSm3bo2E
— ZachXBT (@zachxbt) June 26, 2026
Users wait on uncertain payouts
For affected customers, the shutdown brings immediate consequences. Since 6 July 2026, the exchange has suspended automatic payouts. Instead, every payout request undergoes a manual review, including KYC and AML checks. In practice, that means identity and money-laundering screening of each individual account. AscendEX names neither a timing nor a guaranteed amount.
"We are not in a position today to provide any assurances on the timing or amount of payouts." - Official notice, AscendEX
ZachXBT advised affected users to file reports with law enforcement and regulators. He also pointed to one case with a larger loss. There, the affected user had received no response from co-founder George Jing Cao. For many of those affected, it remains unclear whether and when they will see their balances again. As a result, the conflict is increasingly shifting to the legal level.
AscendEX collapse becomes the first MiCA stress test
The case reaches beyond a single exchange. 1 July 2026 marked the definitive end of the MiCA transition period across the entire EU. Originally, the rulebook was meant to create uniform standards and strengthen investor protection across the whole union. Since then, every provider of crypto services needs full authorisation. This authorisation also carries ongoing capital, governance and transparency obligations. Otherwise, a provider must immediately stop doing business with EU customers.
By the deadline, only 14 trading venues had obtained such full authorisation. The register of the EU securities regulator ESMA listed around 210 full authorisations in total, which also include custodians and brokers. Not every market exit went chaotically, though. Binance withdrew its MiCA application in Greece on 24 June 2026. The market leader wound down its EU business in an orderly way as of 1 July, however, with no reported liquidity problems.
AscendEX thus stands for the other scenario. The exchange still covered a 2021 hack in full from its own funds. Today, however, not even the repayment of pure customer balances is certain. The AscendEX case now counts as the first major test of how EU regulators handle a disorderly market exit. In this instance, customer funds may not be fully covered. How the authorities proceed from here is therefore likely to serve as a reference for future cases.
