MEXC Exchange Under Scrutiny: Insolvency Rumors, Asset Freezes & Proof of Reserves (Nov 2025 Update)
What Is MEXC?
MEXC is a Seychelles-based CEX founded in 2018, serving 40M+ users across 170+ countries. It’s known for trending altcoin listings, airdrops, low trading fees, spot, futures, and staking. Growth markets include MENA, CIS, Europe, Indo-Pak. In 2025 MEXC sponsored Blockchain Life (Dubai), hosting panels on DEX vs CEX and industry trends.
The Spark: Asset Freezes, Withdrawal Issues & User Backlash
- Late October 2025, prominent trader “The White Whale” (@TheWhiteWhaleV2) alleged $3.1M had been frozen since July over ToS violations/automated trading.
- After months of pressure, funds were released Oct 31; CSO Cecilia Hsueh acknowledged mishandling and apologized.
- Hundreds of reports surfaced about account freezes, delayed withdrawals, and long reviews—some locked up to a year.
- On X (Twitter), warnings to withdraw immediately trended, with users fearing an FTX-style collapse.
On-chain picture: Analytics from CryptoQuant and Coinglass flagged record outflows (~$5.5B) in late Oct–early Nov across BTC/ETH/SOL—fuel for the MEXC withdrawal issues narrative.
MEXC’s Response: Proof of Reserves, Merkle Verification & Audit Pledge
- Official stance: No insolvency; freezes tied to risk controls (market manipulation/abnormal trading).
- Nov 3 PoR snapshot:
- BTC reserve ratio: 129.85%
- ETH/USDT/USDC: >100%
- Total holdings: ~$4.56–$5.13B (self-reported)
- Audit: MEXC promised an independent audit and Merkle tree verification so users can verify balances vs reserves.
- Comms: CSO Cecilia Hsueh remained active on X, noting unlocks and successful withdrawals after updates.
Important: Proof of Reserves without liability audits doesn’t prove solvency; it shows asset coverage at a snapshot. Users should verify Merkle IDs and attempt small test withdrawals.
Market Impact & Regulatory Context
- The turmoil coincided with broader crypto volatility (e.g., Bitcoin under $100k headlines), which amplified risk-off behavior.
- Comparisons to FTX (2022) resurfaced, pushing traders to diversify toward Binance, Coinbase, Gate.io, and self-custody.
- Regulatory pressure: For example, the Netherlands’ AFM has publicly noted lack of local authorization for MEXC—part of a wider compliance debate around global CEXs.
Quick Timeline (Oct–Nov 2025)
- Jul–Oct: user reports of frozen funds/withdrawal reviews accumulate.
- Oct 31: MEXC unlocks $3.1M for @TheWhiteWhaleV2; public apology.
- Late Oct–Early Nov: record outflows (~$5.5B); insolvency rumors rise.
- Nov 3: PoR update published; >100% reserve ratios claimed.
- Nov 6: MEXC announces funding-rate tweaks, campaigns, and normal operations messaging.
Proof of Reserves (self-reported snapshot)
| Asset | Reserve Ratio | Notes |
|---|---|---|
| BTC | 129.85% | Above full coverage |
| ETH | >100% | Self-reported surplus |
| USDT | >100% | Self-reported surplus |
| USDC | >100% | Self-reported surplus |
| Total holdings | ~$4.56–$5.13B | Range reflects snapshot variance |
Keywords: MEXC proof of reserves, MEXC PoR, Merkle verification, reserve ratio.
What This Means for Traders (Risk Management)
- Diversify exchanges: Don’t keep all funds on one CEX. Use 3–4 reputable exchanges and self-custody for long-term holdings.
- Verify reserves: Use Merkle proofs where available; track DefiLlama/CryptoQuant/Coinglass dashboards.
- Test withdrawals: Run small test withdrawals after any account changes or policy updates.
- Stay informed: Follow official MEXC updates and critical community threads—avoid “recovery” scams.
- Respect ToS & automation rules: Many MEXC asset freezes cited automated/abnormal trading flags.
FAQ (MEXC Solvency & Withdrawals)
Is MEXC insolvent?
No confirmed insolvency. PoR shows >100% coverage, but only a full, independent audit of assets and liabilities can confirm solvency.
Why were accounts frozen?
MEXC says risk controls around market manipulation/automation triggered reviews. Some accounts were later unlocked; users should ensure KYC/ToS compliance.
Are withdrawals working?
Reports are mixed. Some users cite successful withdrawals following updates; others report delays. Always test small amounts first.
Should I move funds off MEXC?
That’s a personal risk decision. Diversification and self-custody reduce exchange-specific risk.
Conclusion
The MEXC insolvency rumors underscore a familiar lesson: in crypto, transparency and withdrawals matter more than slogans. MEXC’s PoR, audit pledge, and account unlocks are steps in the right direction, but trust will hinge on independent verification and consistent user experience. Until then, manage exchange risk like a pro.
