AscendEX hot wallets run cold: users report frozen withdrawals as ZachXBT spots thin reserves 💸❄️

Multiple users have reported being unable to withdraw funds from cryptocurrency exchange AscendEX, and blockchain investigator ZachXBT has publicly raised concerns about the platform's reserves. On Tuesday, an X account under the name Lorenzo Navarro Rodriguez said a 4,196 USDT withdrawal had been stuck in an "initiating" state since June 10, with repeated customer support inquiries going unanswered. At least five other users replied to the post in the following days, describing similar withdrawal delays. On Friday, ZachXBT said in a Telegram post that AscendEX lacked large-cap reserves for tokens such as Ether ($ETH), USDT ($USDT) and Solana ($SOL), indicating potential "liquidity issues" on the platform. ZachXBT urged the exchange to respond to the user reports and provide more clarity on why its hot wallets have low liquidity. Exchanges rely on liquid reserves of widely traded assets to process customer withdrawals, and a shortage of those assets can lead to delayed withdrawals or, in severe cases, insolvency.

Blockchain data from Arkham, viewed by Cointelegraph on Friday, showed that AscendEX-tagged wallets held roughly $20.2 million in crypto. The wallets were concentrated in smaller-cap assets, with relatively limited holdings of major cryptocurrencies. AscendEX's largest position was $10 million in UNITE tokens, followed by $5.24 million in REUR, $2.9 million in ASD and $600,000 worth of Reservoir rUSD stablecoins, alongside other smaller tokens. Cointelegraph said it had approached AscendEX for comment but had not received a response before publication.

Questions about an exchange's liquidity carry particular weight in the crypto industry following the 2022 collapse of FTX, where customer withdrawal requests exposed a multibillion-dollar shortfall and ultimately led to bankruptcy. That failure triggered a wave of customer withdrawals across the industry, intensified regulatory scrutiny and prompted many exchanges to publish proof-of-reserves reports aimed at reassuring users.