Mexc $3.1M freeze scandal rocks traders, triggers calls for transparency

The Mexc account freeze has ignited a firestorm in the crypto world after $3.1 million in trader funds were locked without release, sparking accusations of overreach and abuse of power.

The dispute, which centers on demands for extraordinary in-person verification, has intensified scrutiny on centralized exchanges and their ability to safeguard user assets.

The $3.1 million freeze that started it all

MEXC reportedly froze the White Whale’s account in July 2025 under vague “risk control” protocols, leaving the trader unable to access funds.

The freeze came without prior notice or detailed explanation — a move that immediately raised red flags among investors.

“This Mexc account freeze is deeply troubling, not just for me but for the entire industry,” the White Whale told independent reporters. “I’ve complied with every KYC demand, from live video calls to address verification, and yet my funds remain locked.”

The exchange’s Global Head of Customer Service, Derrick, personally contacted the trader, offering what he described as a “VIP experience” in Malaysia.

This included luxury hotel accommodations and in-person meetings to complete “final verification.”

However, the White Whale rejected the offer, citing risks associated with crypto kidnappings, which have been reported in markets across Asia, the Middle East, and Europe.

“Asking someone to fly across the world for verification is unheard of,” said Adam Cochran, partner at Cinneamhain Ventures. “It undermines trust and raises questions about whether exchanges like MEXC are acting in good faith.”

Security concerns intensifies globally

The timing of the Mexc account freeze is particularly sensitive. Reports of high-net-worth crypto investors being kidnapped for ransom have surged.

According to Chainalysis, more than $30 million in crypto-related kidnappingshave been recorded since 2023, making physical security a top concern for traders.

This context makes MEXC’s demand appear even more reckless. By pushing for in-person verification, the exchange risks putting traders directly in harm’s way.

Lack of transparency in MEXC’s terms of service

Industry observers note that MEXC’s Terms of Service contain no provisions requiring physical, in-person KYC procedures. Instead, the platform emphasizes standard verification methods such as government ID, proof of address, and video authentication.

“There is no regulatory basis for MEXC to demand a face-to-face meeting in Malaysia,” said Patrick Tan, General Counsel at Novum Alpha. “The lack of transparency in this Mexc account freeze could expose the exchange to legal challenges.”

The Mexc account freeze controversy has become a cautionary tale for the wider crypto community.

It highlights how centralized exchanges, despite offering liquidity and convenience, retain unilateral power to freeze user accounts without warning.

Crypto advocates argue this case underscores the importance of self-custody and decentralized platforms. As industry analyst Mati Greenspan put it:

“When billions of dollars are locked up in centralized platforms, users are at the mercy of arbitrary decisions. The Mexc account freeze is yet another reminder of why ‘not your keys, not your coins’ remains the golden rule.”

Final Thoughts

The ongoing Mexc account freeze dispute has ignited global debate about the rights of crypto traders, regulatory loopholes, and the responsibilities of exchanges.

With $3.1 million at stake and growing scrutiny from the public, the case could become a turning point in how exchanges handle account security and customer trust.

Until clarity emerges, one fact is clear: the Mexc account freeze is a wake-up call for traders everywhere to reassess where and how they store their digital wealth.