Recently, a notable dispute between a crypto trader known as the White Whale and the MEXC exchange has reached a resolution, highlighting issues around fund freezes and communication in the evolving landscape of cryptocurrency exchanges. After months of tension and public campaigns, MEXC has apologized and released approximately $3 million in funds previously frozen due to internal risk control measures. This incident underscores ongoing challenges in crypto regulation, user rights, and transparency in centralized exchanges.
About three months after a pseudonymous crypto trader known as the White Whale reported that the MEXC exchange had frozen approximately $3 million of their holdings, the exchange’s leadership issued a public apology and returned the funds. This resolution follows a period of public outcry and a social media campaign that drew attention to concerns over transparency and risk management in the crypto industry.
MEXC's Public Apology and Fund Release
In a Friday post on X (formerly Twitter), Cecilia Hsueh, MEXC’s Chief Strategy Officer, acknowledged the exchange’s mistake. She admitted that the company “f***ed up” in how it handled the White Whale’s case and apologized for communication missteps. “He can claim it at any time. I messed up in communicating with him. I got emotional, and I shouldn’t have,” Hsueh stated.
Trader's Campaign and Ongoing Concerns
The White Whale’s prolonged freeze prompted a social media campaign, during which he announced an increase in fundraising efforts from $2 million to $2.5 million. He claimed that MEXC had even requested him to fly to Malaysia to resolve the issue and facilitate the fund release. Despite the resolution, the trader highlighted ongoing frustrations, stating, “Most regular users wouldn’t stand a chance in a situation like this,” criticizing the uneven power dynamics at play in crypto trading and custody issues.
Market Impact and Community Reaction
The controversy also influenced MEXC’s market valuation. According to data from Nansen, the exchange’s token (MX) experienced a decline of approximately 3.5%, dropping from $2.30 to $2.22 following Hsueh’s public apology.
While some in the community appreciated the apology, others remained skeptical. The White Whale responded on social media, pointing out that the apology lacked clarity regarding what exactly was being apologized for and criticizing the exchange’s earlier accusations implying criminality or scams, which he deemed damaging and unfounded.
Broader Implications for the Crypto Ecosystem
The incident exemplifies broader concerns within the crypto ecosystem regarding user protections, regulatory compliance, and the transparency of centralized exchanges. As regulators increase scrutiny over crypto markets worldwide, such cases emphasize the importance of clear communication and adherence to fair risk management practices in safeguarding traders’ assets.