What happened?
MEXC froze $3 million belonging to a trader known as The White Whale after flagging two orders placed in the same second as automated trading and initially threatened to forfeit the funds. After public pressure and intervention from on-chain investigator ZachXBT, MEXC’s CSO publicly apologized, admitted the exchange mishandled the case, and released the funds. The exchange said it will set up a fast-track dispute channel and work on transparency and operational fixes.
Who does this affect?
This directly affects The White Whale and other MEXC users who say their accounts were frozen or withdrawals delayed. It also affects ordinary customers and large traders who may now fear arbitrary freezes or poor dispute handling. Finally, it impacts MEXC’s staff and leadership, who face reputational damage and pressure to overhaul risk, ops, and PR processes.
Why does this matter?
It matters because Bitcoin withdrawals from MEXC spiked roughly 30x during the controversy, showing a clear flight of funds and loss of trust. Such outflows can reduce exchange liquidity, raise volatility, and push traders to move assets to competitors, hurting MEXC’s volumes and fees. If trust isn’t rebuilt quickly, investors could reprice the risk of centralized exchanges and regulators might step in, with broader market implications.