For days, the crypto neighborhood has been gripped by the saga of “The White Whale,” a dealer who accused centralized trade MEXC of freezing over $3 million in his account. In a viral thread, he alleged his solely offense was being “too worthwhile”.
He claimed the trade lured him right into a harmful in-person KYC demand and framed the ordeal as a part of a wider trade sample the place merchants are “punished for successful.” Now, in an unique with BeInCrypto, MEXC has addressed the allegations immediately. The trade rejects claims of retaliation, explaining the rationale for account restrictions, and outlining how its danger controls function.
The White Whale’s Claims: “Punished for Successful”
On August 24, The White Whale publicly revealed that the MEXC trade had frozen $3,158,572.32 of his funds since July. He insisted that no Phrases of Service violation was cited and that no proof of wrongdoing was offered.
“My solely conceivable offense? I used to be too worthwhile…I persistently beat their exterior market makers… When the counterparty they want in an effort to keep in enterprise persistently loses, whose aspect do you suppose they’ll choose?” he wrote.
The dealer additional shared screenshots of e mail and Telegram correspondence. He stated MEXC initially invited him to satisfy with its “management crew.” As a substitute, they reportedly linked him with a single govt who demanded he journey to Malaysia for “in-person KYC.”
“I’ve already achieved each type of KYC they’ve ever requested for — stay video, handle verification, a number of layers. Their Phrases of Service include zero point out of in-person KYC. This isn’t compliance. That is coercion,” he added.
The claims, coupled with a $2 million bounty he supplied for trade assist, set off a storm of hypothesis about centralized trade practices.
MEXC’s Response: “Profitability Is Not Grounds for Restrictions”
MEXC, in feedback shared solely with BeInCrypto, firmly rejected the notion that buying and selling success or profitability can set off account freezes.
“At MEXC, account restrictions are by no means imposed based mostly on buying and selling profitability. Our danger management measures had been designed solely to assist defend the integrity of buying and selling on our platform, person belongings, and fulfill compliance obligations,” the trade stated.
MEXC stated the White Whale’s account was restricted as a result of “actions related to the account triggered our danger management methods.” Reportedly, these controls monitor for indicators of market manipulation, spoofing, wash buying and selling, suspicious exercise, or illicit fund flows.
“These measures aren’t taken flippantly or meant to deliberately limit entry to person funds,” MEXC added.
The trade articulated that the majority customers who endure additional verification efficiently regain full entry.
On the In-Particular person KYC Controversy
Maybe essentially the most explosive declare got here from The White Whale’s screenshots, which confirmed a requirement to fly to Malaysia for face-to-face verification.
Whereas the trade didn’t immediately handle why an in-person request surfaced regardless of no such clause in its Phrases of Service, it maintained that compliance measures are grounded in international AML and CFT obligations.
“Our precedence is to make sure that all procedures, together with KYC and danger management compliance evaluate, are clear, standardized, and aligned with international laws. Clear and clear insurance policies govern all person procedures, and any official communication from MEXC will all the time align with these requirements,” the trade informed BeInCrypto.
The White Whale argues his case is symptomatic of a bigger problem: CEXs retaliate in opposition to extremely worthwhile merchants who expose their market-making weaknesses.
Whereas claims counsel this will not be remoted to The White Whale, dozens of merchants supposedly echo comparable frustrations.
“Account evaluations and restrictions choices are by no means tied to buying and selling profitability. They’re often triggered by our danger management methods that analyze uncommon buying and selling exercise, suspicious fund flows, or compliance crimson flags,” MEXC articulated.
The agency pointed to its enforcement document, which incorporates dealing with over 124 freeze requests from legislation enforcement and intercepting 41 circumstances tied to theft or compliance enforcement in Might and June alone.
Within the unique assertion, MEXC informed BeInCrypto that the trade’s false-positive charge for account flags is underneath 1%.
As centralized exchanges function underneath rising international scrutiny, MEXC added that it’s investing in transparency.
“Transparency, equity, and safety stay our high priorities. Whereas compliance measures can generally be inconvenient, they’re important to defending our ecosystem and sustaining the belief of our international communities,” the trade informed BeInCrypto.
In opposition to this backdrop, MEXC has begun publishing quarterly danger management experiences detailing fraud prevention, enforcement circumstances, and safety upgrades. These are designed to provide customers perception into how and why restrictions are utilized.
A Take a look at of Centralized Change Accountability
The White Whale and MEXC dispute highlights the facility imbalance between merchants and centralized exchanges. For the dealer, the freeze proves that “customers are handled as exit liquidity.” For MEXC, the case is an instance of danger controls working as designed in a compliance-driven atmosphere.
Both method, the saga has reignited debate about transparency, equity, and person protections within the crypto trade.
That is very true as billions of {dollars} in buying and selling quantity movement each day by means of exchanges whose inner controls stay opaque to the general public.
“The query now’s easy…How lengthy will the trade flip a blind eye whereas exchanges resort to techniques that belong in crime thrillers, not capital markets?” The White Whale wrote.
Nonetheless, MEXC claims a compliance-first stance, with ongoing transparency. For merchants, the case could also be a reminder of crypto’s oldest lesson: that when belongings are locked on centralized exchanges, management finally lies elsewhere.
The White Whale didn’t instantly reply to BeInCrypto’s request for remark.
The put up Frozen Funds and Compliance Clashes: MEXC Responds to The White Whale’s $3 Million Allegations appeared first on BeInCrypto.