AscendEX Users Report Frozen Withdrawals as Blockchain Sleuth Raises Liquidity Red Flags

Key Points

• Blockchain detective ZachXBT has raised concerns about AscendEX following numerous reports of prolonged withdrawal delays
• Publicly identified hot wallets show minimal holdings of popular cryptocurrencies including ETH, USDT, USDC, and SOL
• The platform has remained silent on the allegations and has not addressed liquidity questions publicly
• AscendEX suffered a major security breach in December 2021 that resulted in approximately $78 million in losses
• Scammers are exploiting affected users by offering fraudulent fund recovery services

Prominent blockchain investigator ZachXBT has issued a warning regarding centralized cryptocurrency exchange AscendEX, suggesting the platform could be experiencing liquidity challenges following numerous user complaints about withdrawal requests remaining stuck for extended periods without processing.

According to ZachXBT’s analysis, he examined AscendEX’s publicly known hot wallet addresses using blockchain analytics tools Arkham and TRM. His investigation revealed that these wallets appeared to contain insufficient quantities of major digital assets such as ETH, USDT, USDC, and SOL — cryptocurrencies that would typically be readily available at an operational exchange.

As part of his analysis, he provided wallet addresses across EVM-compatible chains, Tron, and Solana networks for community verification.

Understanding the On-Chain Evidence

It’s important to contextualize what hot wallet analytics can definitively demonstrate. Hot wallets serve as operational accounts for daily transaction processing. The majority of reputable exchanges store the vast majority of user funds in cold storage solutions, which typically aren’t publicly labeled or easily traceable through blockchain explorers.

Low hot wallet balances represent a potential warning sign, but they don’t conclusively establish insolvency. ZachXBT characterized the situation as indicating “likely” liquidity problems, carefully avoiding an absolute declaration.

However, the volume of user grievances strengthens these concerns. Numerous traders report their withdrawal attempts have remained stuck in an “initiating” status for weeks, with no blockchain transaction hash ever generated. Additional users describe withdrawal requests being canceled without any explanation provided.

Multiple affected users have also indicated that customer support tickets receive only brief initial responses before communication ceases entirely.

AscendEX’s History and Previous Incidents

AscendEX launched in 2018 under the leadership of founders George Jing Cao and Ariel Ling. The exchange originally operated under the BitMax brand name before undergoing its rebrand.

The platform experienced a significant security compromise in December 2021, losing roughly $78 million in the incident. The Lazarus Group was subsequently identified as responsible for the breach.

In May 2026, AscendEX took separate action to halt trading for two stablecoins following what the exchange characterized as a security incident involving irregular token minting activity.

While the exchange’s support documentation does reference occasional deposit and withdrawal delays, and historical maintenance notices have cited wallet infrastructure upgrades, none of these communications specifically address the current volume of user complaints.

Caution Advisory for Affected Users

Traders experiencing frozen withdrawal requests are now becoming targets for fraudulent actors claiming to offer fund recovery assistance in exchange for upfront payments. These purported “recovery” operations represent a well-established secondary scam that preys on victims of exchange difficulties and should be completely avoided.

ZachXBT has previously identified comparable situations at other trading platforms throughout this year, including JuCoin, as industry-wide scrutiny of centralized exchange reserve holdings has intensified.

At the time of publication, AscendEX has not released any official statement addressing the liquidity allegations. The exchange could alleviate user concerns by releasing independently verifiable proof of reserves documentation and establishing a concrete timeline for normalizing withdrawal operations.

The post AscendEX Users Report Frozen Withdrawals as Blockchain Sleuth Raises Liquidity Red Flags appeared first on Blockonomi.