Public Pressure Forces MEXC to Unfreeze $3M, Spurring Crypto Exchange Reforms

MEXC has unfrozen the account of a high-profile trader known as "The White Whale," releasing over $3 million in funds after months of public scrutiny and criticism. The trader, who had launched a social media campaign to demand the return of his assets, announced he will donate the entire amount to supporters and charities. The resolution follows a public apology from MEXC's Chief Strategy Officer, Cecilia Hsueh, who admitted the exchange mishandled the case and pledged to implement reforms to address operational and transparency issues, according to a Yahoo Finance report.

The controversy began in July when MEXC froze The White Whale's account, citing violations of its terms of service after the trader executed two orders within the same second. The exchange initially claimed the activity indicated automated trading and threatened to forfeit the funds, the Yahoo report said. The White Whale denied the allegations and began publicly pressuring MEXC to return his money, gaining support from on-chain investigators like ZachXBT, who amplified calls for accountability, according to a CryptoNewsLand article.

Hsueh's apology on X marked a turning point, with the executive conceding, "We messed up. We apologize to The White Whale, and his money is already released. He can claim it at any time." She acknowledged that MEXC's rapid growth had outpaced the development of its risk, operations, and PR teams, leading to "growing pains" that eroded user trust, the Yahoo report added. The exchange announced plans to establish a "fast-track channel" for resolving account disputes and improving transparency, CryptoNewsLand reported.

The incident has sparked broader concerns about MEXC's reliability. CryptoQuant data shows Bitcoin withdrawals from the exchange surged from 40 per day to over 1,200 in mid-July, with over 1,400 processed daily this week, according to the Yahoo account. Users like Elja and Max Lee reported similar issues, with the latter claiming $3.3 million in USDT remained frozen despite repeated attempts to resolve the matter, according to a Cryptopolitan post. Hsueh defended the exchange's financial stability, stating, "There's a difference between risk control disputes and insolvency," but admitted MEXC needed to address operational shortcomings.

The White Whale's case has also drawn criticism for exposing systemic flaws in centralized exchanges. Pseudonymous trader Joji noted, "It took a while and a bunch of hate to get you to do it. 100% sure this tweet would not exist if he were someone with 100 followers," highlighting concerns about unequal treatment, the Yahoo report said. Hsueh responded candidly: "You're not wrong. It takes a lot to wake up the whole company."

In a surprising turn, The White Whale offered to serve as an unpaid advisor to MEXC to help rebuild trust and improve its practices, according to a Crypto.news article. He stated, "If you truly want to fix what was broken—I'll support you," while defending Hsueh against unfounded sexual misconduct allegations that emerged during the dispute, as reported in a Cryptopolitan report. Hsueh accepted the offer, calling the trader's campaign the "catalyst for MEXC's transformation."

The trader has since announced plans to distribute the recovered funds to early supporters via an NFT campaign and verified non-profits, emphasizing community voting and airdrop mechanisms, according to a Yahoo Finance update. The case has become a benchmark for user rights in crypto, with industry analysts noting the growing influence of public pressure in holding exchanges accountable.

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