ZachXBT

Arkham

Reservoir

rUSD

Multiple users have reported issues withdrawing funds from cryptocurrency exchange AscendEX, which blockchain investigator ZachXBT said may be showing signs of liquidity issues.
An X account using the name Lorenzo Navarro Rodriguez <a href="https://x.com/lornavarro22/status/2069281408275698029" rel="noopener noreferrer nofollow">said</a> in a Tuesday post that a 4,196 USDT withdrawal had remained stuck in an “initiating” state since June 10. The account also said repeated customer support inquiries had gone unanswered.
At least five other users replied to the post over the following days, reporting similar withdrawal issues.
On Friday, ZachXBT said in a Telegram <a href="https://t.me/investigations/346" rel="noopener noreferrer nofollow">post</a> that the exchange lacked large-cap reserves for tokens such as Ether (ETH), USDT (USDT) and Solana (SOL), indicating potential “liquidity issues” on the platform. ZachXBT <a href="https://x.com/zachxbt/status/2070405423002448040" rel="noopener noreferrer nofollow">urged</a> the platform to respond to the reports about delayed withdrawal requests and provide more clarity on why its hot wallets have low liquidity.
Related: <a href="https://cointelegraph.com/news/polymarket-vendor-compromise-drains-29m-users" rel="noopener noreferrer nofollow">Polymarket hit by $2.9M theft, users to be refunded</a>
Exchanges rely on liquid reserves of widely traded assets to process customer withdrawals. A shortage of those assets can lead to delayed withdrawals or, in severe cases, insolvency.
<img alt="" height="794" src="https://s3-images.ctmedia.io/media/content/pasted-image-1706.png" width="632">
ZachXBT flags liquidity and withdrawal issues on AscendEX via Telegram. Source: ZachXBT
<h2 id="ascendex-s-reserves-are-dominated-by-small-cap-holdings">AscendEX’s reserves are dominated by small-cap holdings</h2>
Blockchain data on Arkham viewed by Cointelegraph on Friday <a href="https://arkm.com/explorer/entity/ascendex" rel="noopener noreferrer nofollow">showed</a> that AscendEX-tagged wallets held about $20.2 million in crypto. Arkham-tagged wallets were concentrated in smaller-cap assets, with relatively limited holdings of major cryptocurrencies.
AscendEx had $10 million in UNITE tokens as its largest holding, followed by $5.24 million worth of REUR, $2.9 million in ASD and $600,000 worth of Reservoir rUSD stablecoins, among other smaller tokens.
<img alt="" height="685" src="https://s3-images.ctmedia.io/media/content/pasted-image-1708.png" width="1910">
AscendEX-tagged wallet, top token holdings. Source: Arkham
Cointelegraph has approached AscendEX for comment but not received a response before publishing.
Questions about an exchange's liquidity are highly sensitive in the crypto industry following the collapse of FTX in 2022, when customer withdrawal requests exposed a multibillion-dollar shortfall that ultimately led to the exchange's bankruptcy.
The failure triggered a wave of customer withdrawals across the industry, intensified regulatory scrutiny and prompted many exchanges to publish proof-of-reserves reports in an effort to reassure users.
Magazine: <a href="https://cointelegraph-magazine.com/bitcoin-price-decline-rebound-xrp-risk-hype-token-market-moves/" rel="noopener noreferrer nofollow">Bitcoin slides to $58K, XRP hits $1 but onchain data promising: Market Moves</a>

AscendEX withdrawal complaints mount as ZachXBT questions reserves

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