Behind The MEXC Drama: Is Bankruptcy Inevitable?

[Ben Graham]

Seychelles-based cryptocurrency exchange MEXC found itself in the midst of controversy on Friday as users on social media site X (formerly Twitter) called for immediate withdrawals amid speculation about the exchange’s potential bankruptcy. 

What Happened At MEXC?

Market analyst J.A. Maartun was among the first to draw attention to the situation, sharing a chart on social media that indicated a significant spike in withdrawal transactions around midday.

Researcher Hanzo also shed light on the unfolding drama, revealing the plight of a user known as “The White Whale.” This individual claimed that his account was suspended despite engaging in trading without the use of bots or APIs, leaving him unable to access his funds, which he estimated at between $3 million and $5 million. 

The White Whale alleged that customer support was unresponsive and that when he engaged with Cecilia Hsueh, MEXC’s new Chief Strategy Officer, he was pressured to admit to breaking the rules to have his funds released, a claim he firmly denied.

Cecilia later responded that their conversation should have remained private and accused The White Whale of misrepresenting the facts. MEXC subsequently announced its intention to take legal action against him for alleged misinformation. 

However, as the situation escalated, a wave of support emerged from the cryptocurrency community, including notable figures like ZachXBT, as many users reported similar issues with MEXC. 

This collective response led to warnings on social media urging users to withdraw their funds immediately, fueling the growing unrest.

CSO Issues Apology

In a rapid development, Cecilia issued an apology and confirmed that The White Whale’s withdrawal had been processed. She stated:

We fucked up. We apologize to @TheWhiteWhaleV2, and his money is already released. He can claim it at any time. I messed up in communicating with him. I got emotional, and I shouldn’t have. Since I joined MEXC 2 months ago I’ve been fighting behind the scenes to get MEXC to change. We grew really fast—a few years ago, we were a very small exchange, but given our current scale, our risk, operations, and PR teams have not kept up.

She noted that MEXC has experienced rapid growth, but its operational and public relations teams had struggled to keep pace. “We’re going to change that,” she stated, emphasizing that leadership has begun to recognize the need for improvement in transparency and operations.

In response to the swirling rumors of bankruptcy, MEXC took to social media to clarify its financial status. The exchange stated, “Recent online discussions have circulated unverified rumors regarding MEXC’s financial status. We would like to clearly state that these claims are false and misleading.” They assured users that MEXC remains financially healthy, with all user assets fully backed. 

Featured image from DALL-E, chart from TradingView.com