Withdrawal issues surge at AscendEX amid reserve concerns raised by ZachXBT
Numerous AscendEX customers have experienced withdrawal delays following blockchain investigator ZachXBT's warnings about possible liquidity problems and calls for reserve transparency.
Numerous customers have encountered difficulties when attempting to withdraw their assets from the AscendEX cryptocurrency exchange, with blockchain sleuth ZachXBT suggesting the platform could be experiencing liquidity challenges.
A user operating under the name Lorenzo Navarro Rodriguez revealed in a post on X published Tuesday that their withdrawal request for 4,196 USDT had been trapped in an "initiating" status since June 10. The same account indicated that multiple attempts to contact customer support had received no response.
A minimum of five additional users responded to the original post in subsequent days, describing comparable withdrawal difficulties.
ZachXBT stated in a Telegram message posted on Friday that the exchange appeared to lack sufficient reserves of major cryptocurrency tokens including Ether (ETH), USDT (USDT) and Solana (SOL), suggesting possible "liquidity issues" affecting the platform. ZachXBT called on the platform to address the complaints regarding delayed withdrawal processing and offer greater transparency about why its hot wallets maintain minimal liquidity.
Cryptocurrency exchanges depend on maintaining liquid reserves of commonly traded digital assets to facilitate customer withdrawal transactions. An insufficient supply of these assets may result in withdrawal processing delays or, in extreme circumstances, platform insolvency.
AscendEX's reserves are dominated by small-cap holdings
On-chain information from Arkham Intelligence reviewed by Cointelegraph on Friday revealed that wallets tagged as belonging to AscendEX contained approximately $20.2 million in cryptocurrency holdings. The Arkham-identified wallets showed heavy concentration in lower market capitalization assets, with comparatively sparse holdings of leading cryptocurrencies.
The exchange's largest position was $10 million in UNITE tokens, with $5.24 million in REUR ranking second, followed by $2.9 million worth of ASD and $600,000 in Reservoir rUSD stablecoins, in addition to various other lesser-known tokens.
Cointelegraph reached out to AscendEX requesting comment but had not received any response at the time of publication.
Concerns regarding an exchange's liquidity capacity represent a particularly sensitive topic within the cryptocurrency sector following FTX's dramatic collapse in 2022, during which customer withdrawal demands revealed a shortfall exceeding billions of dollars that eventually resulted in the exchange filing for bankruptcy.
That catastrophic failure sparked a widespread wave of customer fund withdrawals throughout the broader industry, heightened oversight from regulatory authorities and motivated numerous exchanges to issue proof-of-reserves documentation as a means of restoring user confidence.