Increased Activity on MEXC: A Closer Look at Recent Developments
The cryptocurrency exchange platform, MEXC, experienced a noticeable surge in user activity on October 31st. This spike in transactions was attributed to significant withdrawals by users, following the public apology from the exchange’s Chief Strategy Officer. The apology was in response to a situation involving a user known by the pseudonym, The White Whale.
Background: The White Whale Incident
Back in July, a crypto user going by the name The White Whale accused MEXC of unjustly freezing over $3.1 million of his personal assets. The user asserted that this action was taken without any breach of the exchange’s terms of service. In retaliation, The White Whale initiated a $2 million social media campaign against MEXC, alleging that the platform demanded a 12-month review period to unfreeze his assets. This “vague review” process, according to the user, enabled MEXC to effectively hold customers’ funds despite their completion of the advanced Know Your Client (KYC) procedures.
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MEXC’s Public Apology and Commitment to Change
On Friday, the Chief Strategy Officer of MEXC, Cecilia Hsueh, issued a public apology to The White Whale via the social platform X. She disclosed that the user’s funds had been released and could be claimed at any time. Reflecting on the situation, Hsueh admitted that she became emotionally involved in communications with The White Whale, which she acknowledged was inappropriate.
Hsueh further shared her efforts since joining MEXC two months prior, aiming to drive changes within the company. She highlighted the rapid expansion of MEXC from a small exchange to a larger entity and noted that their risk management, operations, and public relations divisions have struggled to keep pace. Additionally, Hsueh confirmed that her apology extended beyond the specific case of The White Whale, indicating that other users facing unresolved account issues would also receive attention as MEXC strives to enhance its transparency and user experience.
Speculations of a Potential Crisis
Shortly after the apology was made public, on-chain analyst Maartunn observed a rise in withdrawal transactions from MEXC, suggesting users were transferring their holdings away from the platform. Another analyst, Burak Kesmeci, also noticed the significant outflows and compared the situation to the infamous downfall of the FTX exchange. Despite these concerns, Kesmeci confirmed that MEXC’s Bitcoin reserves remained untouched at that time.
It’s important to note that prior to FTX’s bankruptcy, their Bitcoin reserves were depleted. As such, monitoring MEXC’s Bitcoin reserves over the coming days could provide valuable insights to avoid a similar fate.
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