MEXC Unfreezes User $3.1M After Public Backlash, But Is a Bigger Crisis Looming?

The popular but not so big crypto exchange MEXC is facing its biggest reputation crisis to date after a months-long dispute with a trader known as The White Whale escalated into a public campaign, legal threats, community investigations, and accusations of financial instability.

What began as a single frozen account has now evolved into a broader debate about centralized exchange practices, transparency, and whether MEXC is dealing with deeper liquidity problems.

How the dispute started: $3.1M frozen with no explanation

The conflict began in mid-2025 when The White Whale publicly alleged that MEXC froze roughly $3,158,572.32 of his trading funds without warning, evidence, or a stated violation. In an August post on X, he wrote:

“No warning. No explanation. No Terms of Service violation, because there was none… My only conceivable offense? I was too profitable.”

He claimed he had already completed MEXC’s highest-level KYC, earned the funds through manual trading, and was being punished for consistently beating the exchange’s external market makers. MEXC allegedly told him his case required a one-year “review”, which he called nothing more than an excuse to hold funds hostage.

The situation escalated when MEXC demanded he fly to Malaysia for in-person verification, something not listed in the platform’s terms of service. According to a BeInCrypto interview, the exchange also accused him of bot trading, a claim he denied and said he provided proof against.

Community response and online investigation

The case gained massive traction when on-chain investigator ZachXBT began requesting information on a mysterious alleged MEXC owner named “Tony,” a figure critics say is intentionally hidden from public records. Influencers, traders, and even creators with locked funds began sharing similar stories.

At the same time, a. viral post popped up about MEXC’s alleged internal practices, including one comedic post where a user claimed he got his funds released only after threatening support staff in Jamaican slang, declaring: “MANNA BADMAN!”

Behind the memes, however, a more serious question started circulating: Is MEXC insolvent?

MEXC breaks silence: apology, fund release, and damage control

On October 31, MEXC Chief Strategy Officer Cecilia Hsueh publicly apologized, saying:

“We fucked up. We apologize to @TheWhiteWhaleV2, and his money is already released… Our risk, operations, and PR teams have not kept up.”

She also acknowledged internal dysfunction and promised reforms, claiming she had been pushing leadership to fix issues since joining two months earlier.

The exchange unfroze the full $3.1M, and The White Whale confirmed the release, later announcing he would airdrop the recovered funds to his NFT community and nonprofits.

But the apology sparked a new wave of criticism for Hsueh.

Others said the apology was only issued after MEXC faced overwhelming public pressure.

Is MEXC heading toward insolvency? bank-run rumors grow

Even after the fund release, new claims emerged alleging that MEXC is quietly experiencing withdrawal delays, shrinking liquidity, and potential bankruptcy risk. One user, @Lovrincrypto, posted:

“This is exactly what happened before FTX collapsed… frozen accounts, slowing withdrawals, leadership silent, community panic.”

The user also mentioned that analyst J.A. Maartun reportedly reviewed MEXC’s financials and suggested the exchange may already be underwater.

Meanwhile, traders across Telegram and X have reported slower withdrawals and flagged potential “bank-run behavior.”

There have also been mentions of MEXC’s headquarter in Seychelles getting “dissolved.”

This also included the reported removal of the exchange from the Seychelles Financial Services Authority register.

The White Whale and others continue to push the question of who really owns MEXC.

What comes next

The public apology might have ended the immediate saga, but the deeper concerns of  hidden ownership, withdrawal fears, and the exchange’s opaque structure, remain unresolved.

MEXC has promised transparency updates, but users are now openly comparing the situation to Celsius, FTX, and BlockFi in their final months.

For now, the takeaway across CT is: “If your funds aren’t in your wallet, they’re not really yours.”

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