High-Net-Worth Trader Accuses MEXC of Freezing $3.1M and Demanding Malaysia Visit

A high-net-worth cryptocurrency trader, known online as White Whale, has alleged that MEXC froze $3.1 million in his account and required him to travel to Malaysia for in-person identity verification [1]. This demand stands out as highly unusual, given that most major exchanges, including Binance, Coinbase, Kraken, and OKX, conduct identity verification remotely through documents, biometric scans, or video calls [1]. The trader raised concerns over the potential safety risks associated with the request, especially in light of the rising number of crypto-related kidnappings.

In response, White Whale launched a $2 million on-chain campaign aimed at pressuring MEXC to unfreeze his funds. The campaign includes $1 million in rewards for NFT participants should the funds be released and another $1 million in donations to charities, all executed transparently on the blockchain [1]. This is one of the largest user-initiated challenges against a centralized exchange and underscores the lengths traders are willing to go to when their assets are suddenly frozen.

White Whale is not alone in this experience. Other traders have also reported account freezes under similar “risk control” measures. One user had $2 million in Tether frozen earlier this year, with MEXC stating it would take a full year for reconsideration. Another reported the disappearance of $92,000 in funds and order history following futures trading [1]. Community estimates suggest around 10% of traders in their circles have faced account freezes on MEXC, indicating a potential systemic issue rather than an isolated case.

MEXC has defended its actions by citing risk management and concerns over market manipulation, wash trading, and other abuses [1]. However, it has not provided clear evidence to support these claims or explained why in-person verification in Malaysia was necessary. Standard KYC processes across other major exchanges typically do not involve such travel requirements, further casting doubt on MEXC’s justification.

The incident raises broader concerns about the precedent such practices could set. If in-person verification tied to frozen assets becomes widespread, it could expose traders to significant safety risks and amplify the power exchanges hold over users. This case highlights the inherent fragility of reliance on centralized platforms for liquidity and access [1]. Traders are increasingly frustrated with the lack of transparency and clarity around risk-control policies. Without clear guidelines, sudden and often irreversible account freezes can occur, leaving users with limited recourse.

Regulators have yet to address in-person verification demands, as current rules such as the FATF Travel Rule focus solely on digital information sharing [1]. The lack of regulatory oversight in this area further complicates the justification for MEXC’s approach.

The result—locked funds with no clear path to recovery—has eroded trust in the exchange and may encourage users to move their assets elsewhere. This incident could also mark a turning point in how traders view centralized exchanges. It highlights the growing demand for clearer regulations and more transparent practices within the crypto industry. If platforms overstep their bounds, users are likely to push back more aggressively [1].

Source: [1] Trader Says MEXC Demanded Malaysia Trip To Unlock $3.1M (https://coinfomania.com/trader-says-mexc-demanded-malaysia-trip-to-unlock-3-1m/)