Tag: Negative

AscendEX Ceases Operations Amidst Regulatory Shift and Liquidity Concerns

AscendEX, a cryptocurrency exchange, announced it ceased operations on July 1, coinciding with the end of the European Union’s Markets in Crypto-Assets (MiCA) transition period. The move has drawn scrutiny, with blockchain investigator ZachXBT raising alarms about the platform’s liquidity and its ability to process customer withdrawals.

Regulatory Hurdles and Market Pressures Cited

In its official statement, AscendEX attributed its shutdown to challenging market conditions and the stringent requirements of the MiCA regulation. The new EU framework has reportedly made it difficult for several crypto firms to continue operating in the region without obtaining the necessary authorizations.

Following the decision to wind down, access to user accounts has been restricted to offboarding processes, and automated withdrawals have been suspended. The exchange indicated that all withdrawal requests will now undergo manual review, which may lead to delays, require additional user information, or result in unprocessed requests.

“We are not in a position to give assurances about timing or amounts today,” the notice stated. “No account holder or group of account holders is given priority outside the documented review process.”

Investigator Highlights Liquidity Shortfalls

ZachXBT previously shared on Telegram that numerous AscendEX users had experienced significant delays, ranging from days to weeks, in processing their withdrawal requests, with some ultimately going unfulfilled. The investigator’s analysis suggested that AscendEX’s hot wallets held minimal reserves of major assets like USDT, ETH, USDC, and SOL, pointing to potential liquidity challenges.

Community reports have corroborated these claims, with many users reporting that their attempts to move funds out of the exchange had been stuck in an “initiating” status for over a week. ZachXBT further alleged that the platform has yet to process user transactions valued in the seven figures.

He has urged affected users to pursue legal avenues, including filing police reports and engaging with relevant national regulators, to hold the platform accountable.

A Tumultuous History

Founded in 2018 by George (Jing) Cao, AscendEX was once a prominent player in the cryptocurrency market. However, the exchange suffered a significant hack in December 2021, resulting in the loss of approximately $78 million in digital assets.

In its shutdown announcement, AscendEX emphasized that financial and operational issues heavily influenced its decision. The firm revealed that a planned strategic transaction intended to bolster liquidity had failed. Combined with prevailing market conditions, these factors compelled the company to reassess its financial standing and explore all available options for its account holders.

AscendEX advised users to submit any complaints through its official channels and stated that it would provide updates on any subsequent steps, particularly if insolvency proceedings were initiated.

Labour MPs are preparing to introduce amendments to the UK’s Representation of the People Bill that would permanently ban political donations made in cryptocurrency. This proposed change aims to address concerns that anonymous digital-asset transfers could be used to channel foreign money into British politics, following a temporary moratorium imposed in March.

According to The Guardian, MPs on Parliament’s all-party anti-corruption group are canvassing support for several amendments to the bill. A key proposal seeks to replace the government’s current moratorium on crypto donations with a permanent ban. This amendment is reportedly gaining broad backing among Labour MPs, amid ongoing scrutiny of the finances of the Reform UK party and its leader, Nigel Farage.

Liam Byrne, the Labour chair of the business select committee, is reportedly behind the crypto ban amendment, which had gathered at least 20 signatures by midday Thursday, according to the paper. Byrne stated that some politicians appear willing to go to “extraordinary lengths” to avoid scrutiny of their finances and urged colleagues to support the changes as a safeguard for UK democracy.

Other proposed amendments include one from former cabinet minister Anneliese Dodds to cut campaign spending limits by nearly a third, from £34 million to £24.4 million, with Dodds arguing that the UK faces “an arms race in funding political campaigns.”

Yuan Yang is proposing limits on the amount of money a party can hold when it is first established, following reports that Rupert Lowe’s Restore Britain launched with £2.5 million without declaring its source. Additionally, an amendment from Mark Sewards aims to introduce checks on donations that could be part of foreign attempts to undermine British democracy.

The UK government imposed a moratorium on crypto political donations in March, following the government-commissioned Rycroft Review. The review warned that the anonymity of digital-asset transfers could be exploited to channel foreign money into British politics. Philip Rycroft, who authored the review, had suggested a temporary “interlude” rather than a permanent ban to allow regulations to catch up.

Campaigners have advocated for a complete ban for months, citing the Electoral Commission’s perceived lack of tools to trace cryptocurrency donations and pointing to existing outright bans in Ireland and Brazil.

The push to strengthen the bill comes as pressure mounts over the funding of Reform UK. The party accepted cryptocurrency donations in June 2025 and has received millions of pounds from expat crypto billionaires Christopher Harborne and Ben Delo, though these specific donations were not made in cryptocurrency.

Nigel Farage is also under investigation by the Parliamentary Standards Commissioner regarding a £5 million gift from Christopher Harborne, received shortly before he announced his intention to run as an MP in June 2024. Farage has stated he was under no obligation to declare the gift and is entitled to spend it as he wishes. However, the transaction reportedly triggered a suspicious activity report from bankers who were unable to trace the ultimate origin of the funds. Farage has denied any wrongdoing.

Ministers have indicated they will propose tougher measures for the elections bill when it returns to the Commons on July 14. Government amendments are expected to include a £100,000 cap on donations from expats for their first year in the UK. A proposal for a £100,000 cap on all individual donations, floated by Stella Creasy, is understood to have less support.

The Representation of the People Bill is expected to return to the Commons on July 14.

Why This Matters

The materials describe a narrow update: Labour MPs are seeking to amend the Representation of the People Bill to permanently ban political donations made in cryptocurrency. Whether the proposed amendments will be accepted and become law.

Broader Context

Source materials place the factual news in this context: Labour MPs are preparing to force the UK government to permanently ban political donations made in cryptocurrency, theGuardianhas reported.

Circle Faces Criminal Complaint Over Stance on Recovering Stolen Crypto

A criminal complaint filed by Wisconsin prosecutors against Circle, the company behind the USDC stablecoin, has reignited a critical debate: why does the world’s second-largest stablecoin issuer appear significantly less inclined than its competitor Tether to assist law enforcement in recovering stolen cryptocurrency?

An investigation by the International Consortium of Investigative Journalists (ICIJ), published on July 8, highlights three key issues fueling this discussion. Circle maintains that it only freezes funds upon receiving valid legal orders. The company also disputes claims that it possesses the capability to simply “burn” and reissue stolen tokens, and it rejects allegations from New York prosecutors that it profits from leaving frozen assets untouched. Critics, however, argue that this policy leaves victims of scams in limbo while their funds disappear.

The current legal challenge originated from a romance scam in Walworth County, Wisconsin. A resident, identified only as “Victim #1,” was persuaded to purchase USDC and transfer approximately 381,000 tokens to what was later revealed to be a fraudulent investment platform. After investigators successfully traced the funds, a judge issued an order for Circle to freeze the associated wallet, a directive the company promptly followed.

Months later, the court escalated its actions, ordering Circle to invalidate the frozen tokens and issue an equivalent amount of new USDC to the Walworth County Sheriff’s Office. Circle refused, citing a lack of technical ability to burn and reissue USDC held within a third-party wallet. Prosecutors responded by filing a criminal complaint, a rare move against a company of Circle’s stature.

Circle subsequently petitioned the court to dismiss the case, asserting that the Wisconsin court lacked jurisdiction and that prosecutors had disregarded alternative proposals it had put forth to compensate the victim. Thomas Binger, the Walworth County prosecutor, stated that the dispute underscores the speed at which scammers can move funds, often outpacing the legal system.

The Wisconsin case is not the sole instance raising concerns. Earlier this year, New York prosecutors informed U.S. senators that Circle typically requires court orders before freezing USDC and has not consistently returned stolen funds even after courts have authorized their release. Given that stablecoin transactions settle within seconds, investigators contend that valuable time is frequently lost before the necessary legal documentation is finalized.

New York prosecutors also leveled a more serious accusation, arguing that Circle continues to earn interest on the reserve assets backing frozen USDC. This, they contend, provides the company with minimal financial incentive to expedite the return of those funds. Circle has not acknowledged this claim.

Blockchain researcher Yury Serov estimates that at least 119 million USDC tokens are currently frozen. While these tokens cannot be moved, they remain backed by reserve assets unless a permanent removal process is initiated.

Circle’s technical explanation has also drawn criticism. Joshua Cooper-Duckett of Cryptoforensic Investigators told ICIJ that the company could modify its smart contracts to facilitate the burning and reissuing of tokens held in third-party wallets. Circle did not respond when questioned about its capacity to implement such changes.

A detail from the court filings notably caught the attention of investigators. Circle disclosed that it had previously discussed a victim compensation process with federal prosecutors that involved permanently freezing stolen tokens before issuing replacement USDC. The company did not clarify whether this arrangement extends beyond federal cases.

The disparity between Circle and Tether’s approaches is stark. Data from AMLBot indicates that Tether froze approximately $3.3 billion in USDT across more than 7,200 wallets between 2023 and 2025. In contrast, Circle froze about $109 million in USDC during the same period, a difference of roughly 30 times by value.

Part of this discrepancy can be attributed to Tether’s burn-and-reissue mechanism. After freezing stolen USDT, the company can destroy those tokens and issue uncompromised replacements to law enforcement or victims. Tether states it has already reissued around $1.1 billion and frozen $4.7 billion linked to illicit activities. Circle does not currently offer a similar public process for third-party wallets, although its court filings suggest it has engaged in discussions about comparable arrangements with federal authorities.

The companies also draw a line in different places regarding intervention. Tether has indicated that it sometimes acts before court involvement if law enforcement requests assistance. Circle, conversely, maintains that it only acts through formal legal channels, arguing this approach safeguards users from wrongful or politically motivated freezes. Investigators counter that by the time such orders are issued, stolen cryptocurrency is often long gone.

Milwaukee County detective Scott Simons told ICIJ that he has encountered over a dozen cases where Circle either declined an early freeze request or where a court order arrived too late. For many victims, he noted, the outcome is simply that their money is lost.

Global Anti-Fraud Operation Nets Thousands of Arrests, Millions in Seized Assets

A sweeping global anti-fraud operation has resulted in over 5,800 arrests and the interception of $293 million in illicit assets, Interpol announced. The initiative, dubbed Operation First Light 2026, targeted sophisticated criminal networks engaged in social engineering fraud and money laundering, highlighting the pervasive nature of these crimes across 97 countries and territories.

Romance Scams and Crypto Laundering at the Forefront

Among the notable cases highlighted by the operation was a 20-year-old individual whose cryptocurrency wallet moved more than $122.5 million in just 10 months. This activity was part of a scheme to launder money stolen from victims of romance scams. Thai police apprehended two individuals in connection with this case. Interpol stated that the operators funneled proceeds into a mix of cryptocurrencies and employed cross-chain token swaps, a technique that shifts funds between different blockchains to obscure their origin and destination.

Operation First Light 2026: A Coordinated Global Effort

The coordinated crackdown, which ran from mid-January to the end of April, saw authorities make 5,811 arrests. In addition to the financial assets seized, investigators identified over 142,000 victims. The operation also led to the blocking of 31,014 bank accounts and the analysis of more than 152,000 cases. Some of these asset freezes were facilitated by I-GRIP, an Interpol mechanism designed to halt the flow of both traditional and virtual assets.

Exploiting Human Psychology for Criminal Gain

Tomonobu Kaya, head of Interpol’s financial crime and anti-corruption center, emphasized that criminal syndicates “exploit human psychology to manipulate their targets.” He added that global security against such threats requires a united front, stating, “no country can stay safe unless all of them push back together.”

The “Pig Butchering” Scam Modus Operandi

Romance scams, often referred to as “pig butchering,” typically begin with a stranger cultivating a relationship over an extended period before directing the victim towards a fraudulent cryptocurrency investment. Once victims’ funds are transferred, launderers rapidly move to obfuscate the trail by transferring funds across blockchains and swapping between different tokens, making it difficult for investigators to track the money.

Evolving Tactics in Crypto Laundering

This pattern has become more entrenched as enforcement efforts have intensified. According to Ari Redbord, a former U.S. Treasury official now with blockchain analytics firm TRM Labs, criminal operations are increasingly relying on stablecoins, low-fee blockchain networks, and rapid cross-chain swaps. These tactics are used to “fragment movement and buy time,” a trend observed after Interpol officially designated scam-compound networks as a transnational threat impacting victims in over 60 countries.

The Scale of Financial Losses

The financial implications of these scams are substantial. United Nations investigators estimate that “pig butchering” operations generated tens of billions of dollars between 2020 and 2024, with many operations originating from fortified compounds in Southeast Asia that utilize trafficked and coerced labor. Cambodia has since enacted legislation that could result in life imprisonment for scam operators, and U.S. courts have imposed lengthy sentences, including a 20-year prison term for an individual linked to a $73 million laundering scheme.

Thailand: A Frontline in the Fight Against Crypto Fraud

Thailand, bordering regions in Myanmar and Cambodia where many scam compounds operate, finds itself on the front lines of this battle. According to a 2025 case study by TRM Labs, Thailand’s Cyber Crime Investigation Bureau receives approximately 800 complaints daily, the majority involving cryptocurrency-enabled fraud or money laundering. Bangkok has become a frequent location for the arrest of suspects, including a Portuguese national accused of $580 million in crypto and card fraud, who was apprehended there in 2025.

AI and Layered Networks Fueling Scam Inflows

Blockchain analytics firm Chainalysis estimated a surge in cryptocurrency scam inflows in 2025, with the average scam payment more than tripling to $2,764. This increase is attributed to fraudsters incorporating artificial intelligence, phishing kits, and layered laundering networks into their operations.

Operation First Light, funded by China’s Ministry of Public Security and supported by regional policing bodies, represents one campaign within a broader global effort. Interpol’s identification of over 142,000 victims within a single four-month period underscores the immense challenge facing law enforcement agencies worldwide.

The Reserve Bank of India (RBI) is reportedly renewing its advocacy for policies that would restrict cryptocurrencies and privately issued stablecoins, according to internal government documents reviewed by Reuters. This intensified push is driven by ongoing concerns within the central bank regarding financial stability and monetary sovereignty.

The RBI’s stance, as detailed in the documents, suggests a policy leaning towards prohibiting banks and financial institutions from holding, trading, or otherwise gaining exposure to cryptocurrencies and privately issued stablecoins. Officials reportedly view such a prohibition as a means to keep digital assets outside the regulated financial system and to mitigate potential risks. A specific concern highlighted by the RBI relates to stablecoins, particularly those pegged to foreign currencies or the rupee, due to their potential to affect domestic monetary sovereignty and financial stability, especially during periods of economic stress.

Despite the RBI’s reported internal advocacy for stricter measures, India has not implemented an outright ban on cryptocurrency trading. The sector currently operates within a regulatory grey zone. Major lenders in the country generally avoid direct exposure to cryptocurrencies, having received multiple warnings from the central bank. This cautious approach from financial institutions reflects the central bank’s persistent concerns and the lack of clear regulatory guidelines.

Adding to the complexity of the crypto landscape in India, the country’s tax department has also raised concerns about the increasing difficulty in tracking cryptocurrency transactions. This challenge is particularly pronounced when transactions are routed through offshore exchanges, peer-to-peer rupee trades, or private self-custody wallets. Data from 2023 indicates a significant gap in tax compliance, with fewer than a quarter of the approximately 645,000 individuals who engaged in crypto transactions reporting them on their tax returns. India currently imposes a 30% tax on crypto gains, with overseas platforms, valuation discrepancies, and unclear ownership further complicating compliance efforts for taxpayers.

The RBI’s renewed focus on restricting crypto activities, coupled with the tax department’s warnings about tracking difficulties and low compliance, points to a potentially challenging regulatory environment for digital assets in India. While a formal prohibition has not been enacted, the central bank’s persistent concerns and the existing tax framework create significant uncertainty for the crypto sector. The exact timeline for any potential formal prohibition or specific regulatory actions remains unclear, as do the precise measures the RBI might pursue if a full ban is not implemented. These uncertainties highlight the evolving and complex nature of cryptocurrency regulation in India.

Why This Matters

The materials describe a narrow update: The Reserve Bank of India (RBI) has reportedly reiterated its support for a policy that leans towards prohibiting cryptocurrencies and privately issued stablecoins. The exact timeline for any potential formal prohibition by the RBI.

Broader Context

Source materials place the factual news in this context: The source article is a report from Reuters.