TLDR
- MEXC froze $3 million from crypto trader “The White Whale” in July after claiming he violated terms by placing two orders within one second
- The exchange initially refused to release funds and threatened legal action, but reversed course after on-chain investigator ZachXBT intervened
- MEXC’s Chief Strategy Officer Cecilia Hsueh issued a public apology admitting the company “fucked up” and released the frozen funds
- Bitcoin withdrawals from MEXC spiked 30 times from 40 per day to 1,237 daily following the controversy
- MEXC plans to create a “fast-track channel” for resolving account disputes and admits its operational teams haven’t kept pace with growth
Cryptocurrency exchange MEXC has released $3 million in frozen funds and issued a public apology to a trader after months of dispute. The case gained widespread attention when prominent on-chain investigator ZachXBT publicly defended the trader.
JUST IN: THE WHITE WHALE RECEIVES $3M BACK FROM MEXC
The White Whale has had his funds unlocked by MEXC and has just received the full amount on-chain.
Congratulations to all for resolving this. pic.twitter.com/mDkk54mWnS
— Arkham (@arkham) October 31, 2025
The incident began in July when MEXC froze the account of a trader known as “The White Whale.” The exchange claimed he violated its terms of service by placing two orders within the same second. MEXC interpreted this as automated trading.
The White Whale denied using bots or APIs for his trades. He said the exchange told him his funds would be forfeited. He began publicly demanding the return of his money.
For weeks, MEXC remained silent on the matter. The situation escalated when ZachXBT intervened on behalf of the trader. The on-chain investigator’s involvement amplified calls for accountability from the exchange.
On Thursday, MEXC Chief Strategy Officer Cecilia Hsueh posted a statement on X. She admitted the exchange made mistakes in handling the case. “We fucked up,” Hsueh wrote in the post.
Hsueh said the trader’s money was already released. She acknowledged getting emotional during communications with him. She admitted she should have handled the situation differently.
Growing Pains and Operational Issues
The exchange’s CSO explained that MEXC experienced rapid growth in recent years. The company went from a small operation to a top-10 exchange by trading volume. However, its operational teams failed to scale at the same pace.
Hsueh said the exchange’s risk, operations, and PR departments have not kept up with growth. She called these issues “growing pains” that need addressing. The leadership team now recognizes the need for improved transparency.
MEXC plans to launch a “fast-track channel” for resolving similar account disputes. The exchange aims to prevent similar incidents from occurring in the future. Hsueh joined MEXC two months ago and has been working to implement changes.
The controversy drew criticism from other traders in the crypto community. One trader noted it took significant public pressure to force action. Another suggested the outcome might have been different if the trader had fewer followers.
Hsueh responded candidly to the criticism. She admitted the trader was correct in his assessment. She said it takes substantial effort to mobilize action across the entire company.
Withdrawal Spike and User Concerns
Data from CryptoQuant shows Bitcoin withdrawals from MEXC surged during the controversy. Daily withdrawals jumped from around 40 to 1,237 in mid-July. This spike coincided with the freezing of The White Whale’s account.
🚨 WARNING: Exchange withdrawal transactions on MEXC are exceptionally high pic.twitter.com/iComt03ZyG
— Maartunn (@JA_Maartun) October 31, 2025
Withdrawals remained elevated throughout the week. The exchange processed over 1,400 Bitcoin withdrawals on Friday alone. The increase suggests users lost confidence in the platform’s handling of funds.
Multiple users came forward with similar complaints about frozen accounts. Trader Elja said he faced false allegations from the exchange. His issue was resolved after 14 days, but he no longer trusts the platform.
Other users accused MEXC of ignoring withdrawal requests for over a year. The White Whale claimed hundreds of users contacted him with stories of frozen accounts. These reports point to a pattern of account management issues at the exchange.
Speculation about MEXC’s financial health spread on social media. The exchange denied these rumors and stated its finances remain healthy. MEXC said all user assets are fully backed and that bankruptcy claims are false.
