Crypto Exchange AAX Halting Trades: There is already a lot of tension and uncertainty after the FTX collapse last week, but they are not the only exchange experiencing hardship. AAX, another crypto exchange, recently halted trading, which might go on for ten days. While it denies exposure to FTX, the collapse is certainly a factor in AAX’s decision.
Scheduled upgrade: AAX cited a scheduled upgrade as the reason behind the suspended trading. It said the action was long planned and was only delayed due to the market conditions. According to a statement made by AAX, the upgrade will serve to protect users from malicious attacks the company observed.
- The failure of a third-party partner supposedly led to some users’ balance data being abnormally recorded in AAX’s system. Due to that, the technical team at the exchange must proofread and restore the system manually.
- The attempt to ensure maximum accuracy of all users’ holdings led to AAX halting trades.
Regular operations will resume: AAX has ensured users that regular operations will resume, giving a timeframe of 7-10 days before everything could be resolved properly. AAX halting trades during the update is meant to “avoid fraud and exploitation.”
- The crypto exchange said that it understood the importance of users being able to make withdrawals and make transactions as soon as possible, so it is looking to offer limited withdrawals. However, the goal is still minimizing risk.
- AAX created a form for withdrawal and other “operational requests.” It will be handled by customer service and resolved manually in coordination with other teams. The process will take longer than usual to go through.
Daily updates: AAX also promised to provide daily updates as the situation proceeds, doing so via social media and Telegram. The updates will include withdrawal status and information about the system update, offering full liquidity and risk management transparency.
- The need for transparency is higher than ever as traders and investors deal with the collapse of FTX.
Investors are currently fleeing from exchanges: AAX halting trades comes at a time when people are fleeing from exchanges, with users pulling away worldwide. It has led to nearly $4 billion in Bitcoin (BTC), $2.5 billion in Ether (ETH), and $2 billion in stablecoins being yanked from exchanges last week alone.
The withdrawals began when FTX started to struggle and have grown increasingly intense. While AAX denied exposure to FTX, the collapse of the massive crypto exchange has reverberated across the industry.
- AAX remarked that “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 was in the same statement that AAX mentioned a third-party audit and reassured users that all AAX products and features remained operational and unaffected, allowing users to trade without interruption.
Transparency is important: AAX is not the only crypto industry player that has started to push transparency in the wake of the FTX collapse. Other companies that have opened up include Binance, the world’s top crypto exchange, OKX, KuCoin, and Huobi.
- Binance revealed some of its wallets and holdings to reassure investors and traders. Meanwhile, others are sharing details about themselves, including “proof of reserves.”
Latest update from AAX: Today, AAX released a statement on social media saying that they had received over 2000 requests for withdrawal, which they are reportedly processing. They have commented that the process will be longer since it is being verified manually, though they are also being extra cautious to avoid phishing activities. The exchange also mentioned that it is working on more effective solutions and will provide further updates. Clearly, AAX halting trades on the platform has had an impact.
