MEXC Under Fire: Whale Claims $3M Funds Frozen
The White Whale vs. MEXC: A $3 Million Standoff
A prominent crypto trader known as The White Whale has publicly accused MEXC exchange of freezing over $3 million of his funds. In an exclusive interview with BeInCrypto, The White Whale detailed the situation, sparking widespread debate and raising serious questions about centralized exchange (CEX) accountability.
The core of the dispute revolves around MEXC's demand for an in-person verification in Malaysia, a requirement The White Whale deems unacceptable and not outlined in the exchange's Terms of Service.
"The only acceptable resolution is simple: release my funds immediately. I’m not a criminal. I’ve broken no rules," The White Whale stated.
He further explained that his security team advised against traveling to a foreign jurisdiction, citing potential safety concerns.
MEXC's Response: Compliance and Risk Management
MEXC responded to the allegations, citing compliance and risk management as the reasons for the fund restrictions. The exchange stated that commenting on the specifics of The White Whale's case would be considered “tipping off.”
"MEXC has recently continued to enhance its risk control framework, with a particular focus on strengthening compliance risk management... We imposed temporary withdrawal restrictions and required the affected users to complete advanced KYC verification," an MEXC spokesperson said.
MEXC maintains it adheres to compliance requirements and reports suspicious transactions, submitting related reports in July and August.
Legal Recourse Limited, Public Pressure Mounts
The White Whale admitted that legal action against MEXC is unlikely due to the exchange's structure and Terms of Service. This has led him to focus on raising public awareness and applying collective pressure.
"The voice of the people is all that’s left. That’s why I’m doing this," he explained.
From Trading to Advocacy
The White Whale, drawing on his background as a pilot, emphasized the importance of discipline in trading. He argues that the current dispute has diverted his attention from trading, costing him potential opportunities.
To further highlight his case, he launched a $2 million bounty campaign tied to an NFT claim system, garnering significant community support.
Proof-of-Reserve Concerns and Transparency
This incident has amplified existing concerns about the transparency and proof-of-reserve (PoR) practices of CEXs, especially after the collapse of FTX.
While MEXC claims to offer a verifiable proof mechanism using a Merkle Tree structure and has a $100 million Guardian Fund, critics argue that independent verification is still limited. Some users have reported similar KYC issues on social media, such as extended holds on funds and difficult verification processes.
Implications for the Crypto Industry
The White Whale's campaign underscores the broader tension between traders seeking transparency and centralized platforms operating with often opaque structures. This dispute raises critical questions about the industry's tolerance for exchanges that impose arbitrary demands and potentially rewrite rules mid-game.
As the standoff continues, the crypto community is left to grapple with fundamental questions of trust and accountability within centralized exchanges. It serves as a stark reminder of the importance of due diligence and understanding the terms of service when using any crypto platform.