Crypto Exchange AAX Suspends Withdrawals as FTX Failure Reverberates

Crypto exchange AAX said it had suspended activity, citing a scheduled upgrade that had been delayed by turbulent markets.

The failure of a third-party partner means services will be delayed for as long as 10 days, the Hong Kong-based company said Sunday. The exchange did not identify the partner, and has said it has no exposure to FTX, a rival whose collapse has caused chaos in the industry.

“Withdrawals have been suspended to avoid fraud and exploitation,” the company said. “AAX will continue our best efforts to resume regular operations for all users within 7-10 days to ensure the utmost accuracy.”

Users’ balances have to be manually restored after a partner failed, causing the system to record abnormal data, the company said. Vice-President Ben Caselin tweeted that the delay was being taken as an “extra precaution” following scheduled maintenance.

On Friday, the company, which launched in 2019 as the first external user of the London Stock Exchange Group’s matching technology, said it had no financial exposure to FTX or its affiliates. It stores a “substantial amount” of its assets in cold wallets and doesn’t lend out user funds to venture activities, it said.

FTX filed for bankruptcy protection in the U.S. on Friday, and CEO Sam Bankman-Fried resigned. There have also been reports of FTX’s assets being hacked, and of the exchange using customer funds to prop up its trading arm Alameda.

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