MEXC Admits Major Failure, Releases Frozen Funds Amid Widespread User Outcry
After intense public pressure, a major crypto exchange has reversed a controversial decision, revealing systemic issues and prompting a surge in customer withdrawals from the platform.
Furedata - Centralized exchange MEXC has issued a public apology and released the $3 million in assets belonging to a crypto trader, acknowledging significant errors in its handling of the months-long dispute. The funds had been inaccessible to the user since July of this year.
The controversy began when the pseudonymous influencer, known as The White Whale, had his account suspended. MEXC alleged that two trades executed in a single second violated its terms by suggesting non-manual activity, a claim the trader vehemently refuted as grounds for forfeiture.
Following a vocal campaign on social platforms, which gained support from on-chain investigator ZachXBT, the exchange capitulated under public scrutiny. The persistent pressure from the trader and his supporters proved decisive in forcing the exchange to reverse its initial position and return the funds.
MEXC’s Chief Strategy Officer, Cecilia Hsueh, made a candid admission of a major error on the social platform X. She stated that her communication with the user was emotional and improper, and announced plans to develop an expedited channel for resolving such account issues.
Hsueh also acknowledged a comment suggesting the trader’s large following was the catalyst for action, conceding it requires significant outcry to prompt company-wide change. The White Whale reported that hundreds of other users with indefinitely frozen accounts had since contacted him for assistance.
The CSO attributed the operational failures to the company’s rapid expansion into a top-ten exchange by volume. She explained that the risk, operations, and public relations departments had not scaled effectively to manage this growth, but promised that the leadership was now committed to reform.
Data from CryptoQuant, as detailed by Decrypt (November 1, 2025), illustrates a dramatic increase in Bitcoin withdrawals coinciding with the incident. Daily withdrawals surged from 40 to 1,237 in mid-July and have remained elevated, with recent figures reaching 1,450 in a single day.
This event has eroded user confidence, with other traders now reporting withdrawal difficulties and similar account freezes. One user described how the exchange, once helpful, became unresponsive for over a year, while another prominent trader stated he could no longer trust the platform.