Is MEXC a Scam Exchange? Unrolling the Events Behind the White Whale Controversy

With over $4 billion in daily trading volume and a top-ten ranking on CoinMarketCap, MEXC is a giant among crypto exchanges. But over the past week, the company has faced a reputational crisis. After freezing $3 million belonging to a trader known as The White Whale, then later apologizing and unfreezing the funds, the platform is under fire again, this time for a wave of user allegations questioning its integrity and transparency.

The controversy has reignited one of crypto’s oldest debates: how much trust can traders place in centralized exchanges when the rules can change without warning?

The Spark: A Trader’s $3 Million Freeze

According to The White Whale, the issue began in mid-2025, when his verified MEXC account was suddenly frozen without notice. The exchange allegedly told him the only way to unlock his $3.1 million balance was to fly to Malaysia and verify his identity in person, a requirement he claims “appears nowhere” in the company’s Terms of Service.

“The only acceptable resolution is simple: release my funds immediately,” White Whale in an interview. “I’ve broken no rules. Meanwhile, MEXC is breaking theirs by insisting on an in-person meeting that doesn’t exist in the agreement.”

He said he initially considered the request but was warned by his own security team that such a trip could pose serious personal safety risks.

“I have a wife and two young daughters at home. Some things are worth more than money,” he said.

As the stalemate dragged on, the trader began publicly documenting his experience, posting wallet records, screenshots, and timelines. Within days, the campaign drew thousands of supporters, many sharing their own frustrations with MEXC’s withdrawal policies.

The Public Pressure Campaign

By late October, hashtags like #FreeWhiteWhale and #MEXC trended across X (formerly Twitter). The trader’s persistence, combined with mounting community pressure, became impossible for MEXC to ignore.

The White Whale gets his $3M back from MEXC

After months of dispute, MEXC has finally unlocked and returned $3M in funds to The White Whale.

For context: Trader (@TheWhiteWhaleV2), known for managing millions in assets, accused MEXC of freezing his funds without cause and… pic.twitter.com/A23VtzvQVI

— Onchain Lens (@OnchainLens) October 31, 2025

In response, MEXC issued a public apology on October 31 and released the frozen funds. The statement called the freeze a “risk-control misunderstanding,” adding that the exchange would strengthen its customer communication systems.

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…

— Cecilia Hsueh (@cecilia_hsueh) October 31, 2025

While White Whale confirmed receipt of his funds, he also made clear that this wasn’t the end of the fight. “This is not just about my account,” he said. “Hundreds of traders have similar stories. Something is fundamentally wrong at MEXC.”

MEXC’s Side of the Story

MEXC, for its part, has defended its actions as part of a broader compliance effort. In its statement, a company spokesperson said the exchange “identified potential risks” during routine checks and imposed “temporary withdrawal restrictions” while requiring “advanced KYC verification.”

“MEXC has continued to enhance its risk-control framework with a focus on strengthening compliance,” the spokesperson said. “All procedures are aligned with global regulatory standards.”

The exchange cited anti-money laundering (AML) and suspicious transaction reports filed in July and August 2025 as evidence that its actions were not arbitrary.

Still, the lack of clarity over the Malaysia requirement, and the silence around similar user complaints has fueled skepticism among traders and influencers alike.

Mounting Allegations and Community Concerns

Shortly after MEXC’s apology, a thread on MEXC’s dark practices went viral with user’s grievances and alleged illicit practices amongst the executives of MEXC. The thread, supported by screenshots, purported chats, and images, claimed that MEXC engaged in unethical activities ranging from user fund manipulation to bot-driven social metrics.

Among the claims made by users in that thread were:

• Over $10 million in allegedly frozen withdrawals from various accounts;
  
• Reports that MEXC’s system may have counter-traded against users, creating sudden price wicks and liquidations in low-cap pairs;
  
• Accusations of fake social media engagement, suggesting that a significant share of followers and likes on official accounts were inflated by bots;
  
• Claims from supposed whistleblowers pointing to internal misconduct and misuse of power.

The thread also linked to past complaints about delayed withdrawals and non-transparent listing practices. While these claims have not been independently verified, they added to the perception of unrest among the exchange’s user base.

As of now, MEXC has not directly addressed the specific allegations, though the exchange continues to maintain that it complies with global regulatory standards.

Adding to the debate, on-chain investigator ZachXBT also questioned the exchange’s transparency.

Transparency question: Why does MEXC hide its beneficial owner from the public?

cc @cecilia_hsueh

— ZachXBT (@zachxbt) October 31, 2025

Proof-of-Reserve and Trust Issues

The White Whale controversy also reignited broader questions about proof-of-reserve (PoR) and centralized exchange accountability, topics that have haunted the industry since the collapse of FTX in 2022.

MEXC has stated that its reserves are fully verifiable using a Merkle Tree structure, allowing users to confirm balances independently. The exchange also highlighted its $100 million Guardian Fund, designed to protect user assets.

However, critics argue that on-chain transparency doesn’t solve governance issues, especially when fund freezes and internal verification policies aren’t disclosed publicly. “It’s not about the code, it’s about the conduct,” one analyst wrote on X.

A Trader’s Campaign Turns Grassroots Movement

White Whale’s persistence transformed the situation from a personal dispute into a community campaign. His NFT-based “bounty” initiative, which invited supporters to claim tokens tied to his cause, attracted over 24,000 wallets in days.

“The voice of the people is all that’s left,” “Legal action is impossible; that’s how MEXC’s structure is built. So public pressure is the only weapon.”

For many traders, this sentiment resonated. In a post-FTX world, the idea that even large exchanges can arbitrarily restrict access to user funds has reignited calls for self-custody and decentralized alternatives.

Where Things Stand Now

As of now, MEXC remains operational and among the top ten global exchanges by volume, averaging more than $4.2 billion in daily spot trading, according to CoinMarketCap.

Still, the phrase “MEXC scam exchange” continues to trend, not as a proven label, but as a reflection of the community’s frustration. The exchange’s silence on broader allegations has kept suspicion alive, even as it attempts to move forward with new listings and promotional campaigns.

Conclusion

So, is MEXC a scam exchange? The facts remain contested. The company says it follows compliance standards, while traders like White Whale argue that these standards are being weaponized against users.

What’s undeniable is that the White Whale case has exposed deep cracks in centralized exchange governance. For many in crypto, the real question isn’t whether MEXC scammed a trader, it’s whether the entire CEX model can still be trusted to hold user funds without oversight.

In an industry built on transparency, silence can be the loudest signal of all.

Disclaimer

This article is based on verified media interviews, user statements, and public information. Allegations mentioned herein have not been independently verified. It does not constitute financial or legal advice. Cryptocurrency investments are highly volatile; readers should do their own due diligence before making any financial decisions.

Get the news in a Jist. Follow Cryptojist on X and Telegram for real time updates!