Crypto Exchange AAX Suspended Withdrawals

Nov. 14, 2022
Crypto Exchange AAX Suspended Withdrawals

AAX, a Hong Kong-based crypto exchange, said that its third-party partner[unnamed] failed to perform a scheduled system upgrade, causing some users’ balance data to be incorrectly recorded. However, to prevent “fraud and exploitation,” AAX has suspended withdrawals for 7-10 days to ensure maximum accuracy. Integration is taking longer than usual due to current market conditions.

AAX vice president Ben Caselin tweeted:

“Bad timing for a scheduled maintenance at @AAXExchange, aimed to address serious vulnerabilities given the already fearful circumstances in industry, opening up will require some caution and will be gradual, as sentiment cools.”

With the insolvency last week of one of our industry’s biggest players, crypto users are concerned about centralized digital asset exchanges’ financial and operational stability, said in a exchanges’ blog post published on Sunday. It points to the collapse and subsequent bankruptcy of major crypto exchange FTX, which crashed the crypto industry.

The exchange said it planned a system update to protect its customers from the many malicious attacks we are witnessing during this vulnerable time. AAX claims:

“We understand it is important for users to be able to withdraw and transact as soon as possible, and we are working extremely hard to offer limited withdrawals to minimize risk.”

The exchange said that the Customer Service Team will with operations, security, and compliance teams to resolve requests one by one manually.

On November 11, Sam Bankman-Fried of FTX resigned as CEO as the cryptocurrency exchange voluntarily filed for Chapter 11 bankruptcy proceedings in the US. FTX admitted that unauthorized transactions of more than $600 million occurred from its wallet, and the company transferred all of its digital assets to “cold wallet custodians.” However, AAX stated on Sunday that it had no financial ties to FTX or its affiliates. It added:

“More importantly, all digital assets on AAX remain intact with a substantial amount stored in cold wallets, and user funds are never exposed to counterparty risk from any financing or venture activities.”

Usually, the exchange does not ask users for their account passwords or other information that could affect access to funds. But the exchange warns users that some relevant information, such as a copy of their ID and registered contact information, will be required to verify the manual withdrawal request.

Syed Ali Haider

Researcher & Editor
Ali Haider is a Blockchain enthusiast and writer passionate about enhancing the acceptance, adoption, and integration of Blockchain technology worldwide. He has also advocated for digital freedom and cybersecurity for many years.