Cryptocurrency exchange MEXC saw increased activity on its platform on Friday, October 31, with several users apparently withdrawing their assets. These mass withdrawals coincided with the exchange’s Chief Strategy Officer’s public apology for mishandling a situation involving a user with the pseudonym The White Whale.
Earlier in July, The White Whale alleged that MEXC had frozen more than $3.1 million in personal funds without any violations of its terms of service. The crypto user later launched a $2 million social media push campaigned against the exchange, claiming that the trading platform had requested a twelve-month review period before releasing the funds.
The White Whale said the “vague review” allowed the exchange to hold clients’ funds hostage, despite completing the platform’s most advanced KYC (Know Your Client) process.
MEXC apologizes for withholding users’ personal funds
Speaking on Friday was Cecilia Hsueh, Chief Strategy Officer of MEXC went to X to apologize to White Whale on behalf of the exchange. After revealing that the user’s money had been released and “he can claim it at any time,” the exchange’s director said she became emotional in communicating with White Whale when she shouldn’t have.
Hsueh added in the post on X:
Since joining MEXC two months ago, I have been fighting behind the scenes to change MEXC. We have grown very quickly: a few years ago we were a very small exchange, but given our current size, our risk, operations and PR teams have not kept up.
Furthermore, the exchange’s CSO clarified that its statement was not just limited to the White Whale case. Hsueh said consideration will also be given to other users with unresolved account issues as they look to implement changes that will improve their transparency.
Source: @cecilia_hsueh on X
Is another FTX fiasco coming?
A few minutes after this apology was posted on the X platform, pseudonymous on-chain analyst Maartunn wrote revealed that the recording of foreign exchange transactions on MEXC was on the rise. At the time, it appeared that users were removing their funds from the cryptocurrency platform.
Burak Kesmeci, another prominent on-chain analyst, also noted the large outflows from the MEXC exchange and compared this situation to that of the now defunct FTX exchange. However, the crypto expert later revealed that the exchange Bitcoin reserves are still intact.
It is worth mentioning that FTX’s Bitcoin reserves reached zero days before the exchange declared bankruptcy. Therefore, if such an incident repeats itself, Bitcoin reserves could be worth keeping an eye on in the coming days.
The total crypto market capitalization on the daily timeframe | Source: TOTAL chart on TradingView
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