The Hong Kong-based cryptocurrency exchange AAX has reiterated that withdrawals have been suspended on the platform with no connection to the ongoing effects of FTX’s collapse and that any claims to the contrary are untrue.
On November 13, the crypto community reported seeing a “system upgrade notification” message stating that a system upgrade “is taking longer than usual,” which will cause withdrawals to be delayed. Some worried that the exchange would follow FTX and BlockFi as the third domino to fall.
The exchange acknowledged that it was understandable for users to panic after the exchange stopped processing withdrawals on November 13.
“In light of the recent liquidity crisis of one of our industry’s largest players, crypto users are understandably concerned about the operational and financial stability of centralized digital asset exchanges.”
In a post on its official Twitter page, the exchange said, “We are hopeful that as a community, we can face these difficult times together.”
The cryptocurrency exchange, which has an estimated 2 million users globally, stated that the scheduled system upgrade was required due to “the failure of our third-party partner,” which led to some users’ balances being “erroneously recorded in our system.”
It has therefore restricted its services to reduce the likelihood of additional risks, such as a seven to ten-day suspension of withdrawals “to prevent fraud and exploitation.”
Fears of FTX contagion have prompted many in the crypto community to advise others to withdraw their funds from centralized exchanges and into self-custody solutions.
In a November 13 Twitter post, AAX vice president Ben Caselin acknowledged the upgrade’s inconvenient timing but stated that it was intended to address “serious vulnerabilities.”
In an earlier tweet on November 11, AAX stated they had “no financial exposure to FTX and its affiliates.”
“More interestingly,” the company added, “all crypto 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.”
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