World’s 2nd biggest spot exchange halts client withdrawals
Atom Asset Exchange (AAX) has halted client withdrawals on its platform, but said the move wasn’t part of a broader limit on activity in the wake of FTX’s collapse.
It comes only days after a Twitter thread in which AAX said they had “no financial exposure to FTX and its affiliates.” Instead, the Hong Kong-based crypto exchange cited the failure of a third-party partner, which caused some users’ balance data to be improperly recorded while scheduling a system upgrade. Hence, AAX halted its services to prevent further risks, while the technical team has had to manually proofread and restore the system to ensure accuracy of all users’ holdings.
Some crypto firms may be exposed to the embattled FTX.com, either by having held their balances on the exchange or by owning FTX’s native token, FTT, which plunged around 94% last week. While the extent of the contagion across the industry players remains unclear, some firms have given information about their exposure to FTX, including bankrupt crypto lender Celsius Network and asset manager CoinShares.
“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,” it added.
AAX expects to resume regular operations for all users within 7-10 days, but its staff will then review the withdrawal requests manually one by one in coordination with the security, operations, and compliance teams.
“In light of the insolvency of one of our industry’s largest players last week, crypto users are rightfully concerned about the operational and financial stability of centralized digital asset exchanges,” the statement reads.
AAX, powered by the London Stock Exchange Group’s LSEG Technology, has seen a spike in trading volume since the start of the year, rising 285 percent from $14.9 billion during the period. Per recent industry reports, spot trading volume on institutional cryptocurrency exchange rose to $57.2 billion, making it the largest exchange by volume after Binance for the first time in its history.
Meanwhile, CoinGecko has awarded AAX a Trust Score of 8 back in august, which indicates that the institutionally focused platform is now ranked as a 3-star Certified Ethereum Professional (CEP) Exchange.
Among the ranking criteria, AAX allegedly scored favorably in terms of liquidity, scale, cybersecurity, API coverage, and the availability of a senior leadership team. AAX was also recognized as a digital asset exchange that has not yet experienced security/functional issues that can potentially affect a user’s fund safety.