MEXC Faces Scrutiny Over $3M Account Freeze Allegations
The crypto community is closely following allegations made by a trader known as "The White Whale," who claims that centralized exchange MEXC froze over $3 million in his account. The trader alleges that the exchange requested he travel to Malaysia for in-person KYC after restricting his account.
"Punished for Winning?" The White Whale's Claims
On August 24, The White Whale publicly stated that MEXC had frozen $3,158,572.32 of his funds since July. He asserts that MEXC has not provided a valid reason or evidence of any Terms of Service violation.
"My only conceivable offense? I was too profitable…I consistently beat their external market makers… When the counterparty they need in order to stay in business consistently loses, whose side do you think they will pick?"
The trader shared screenshots showing that MEXC initially invited him to meet with its leadership. Instead, he claims they connected him with an executive who demanded he travel to Malaysia for in-person KYC.
"I’ve already done every form of KYC they’ve ever asked for — live video, address verification, multiple layers. Their Terms of Service contain zero mention of in-person KYC. This is not compliance. This is coercion," he added.
MEXC Responds: Risk Controls, Not Retaliation
MEXC responded to the allegations, stating that account restrictions are not based on trading profitability.
"At MEXC, account restrictions are never imposed based on trading profitability. Our risk control measures were designed solely to help protect the integrity of trading on our platform, user assets, and satisfy compliance obligations," the exchange stated.
MEXC claims the White Whale’s account was flagged due to activities that triggered its risk control systems, which monitor for market manipulation, spoofing, wash trading, and other suspicious activities.
"These measures are not taken lightly or meant to intentionally restrict access to user funds," MEXC added.
In-Person KYC Controversy
The White Whale's screenshots revealed a demand to travel to Malaysia for in-person KYC. While MEXC didn’t directly address this, they emphasized that compliance measures are based on global AML and CFT obligations.
"Our priority is to ensure that all procedures, including KYC and risk control compliance review, are transparent, standardized, and aligned with global regulations. Clear and transparent policies govern all user procedures, and any official communication from MEXC will always align with these standards," the exchange stated.
MEXC reports a false-positive rate for account flags of under 1% and publishes quarterly risk control reports for transparency.
Centralized Exchange Accountability in Question
The dispute between The White Whale and MEXC highlights the power dynamics between traders and centralized exchanges. The case underscores the importance of transparency, fairness, and user protections within the crypto industry.
As centralized exchanges face increasing global scrutiny, MEXC says that it's investing in transparency and publishes quarterly risk control reports, detailing fraud prevention, enforcement cases, and security upgrades.
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