**MEXC Crypto Exchange Faces Backlash Over Frozen $3 Million Account**
This week, MEXC, a prominent centralized crypto exchange, made headlines after reportedly blocking access to a trader’s account containing $3 million. The affected user, known as The White Whale, claims that his account was mistakenly placed under a “risk review” for allegedly violating trading rules.
### Why Was The White Whale’s Account Blocked?
According to reports, MEXC flagged the account due to alleged breaches of their trading policies and placed it under risk review. The White Whale stated that he had a meeting with MEXC’s Chief Security Officer, Cecilia Hsueh, on October 20 to address the issue. Despite this, his account remained frozen even ten days later, preventing him from accessing his funds.
In response, Cecilia Hsueh assured that the exchange might be close to reaching an agreement with the trader. However, her comment about allocating The White Whale’s $3 million “to the community” triggered significant backlash:
> “As I’ve said before, this is not about the money. MEXC remains fully prepared to allocate the $3 million fund for the community.”
### Community Reaction and Backlash
The crypto community quickly voiced concerns over MEXC’s handling of the situation. A user named Crypto Vikings warned about what he called “CEX mafias” — centralized exchanges that retain user funds regardless of whether trades result in profits or losses. He questioned:
> “How long till these CEX mafias keep exploiting their users in the name of ‘risk of investing in crypto’?”
Several other users also shared stories of frozen MEXC accounts without clear communication or resolution. Similar frustrations have been voiced by users of other major centralized exchanges like OKX, pointing to a broader issue with CEX platforms.
While some account freezes may be legitimate compliance measures, many are seen as “false flags” that result in prolonged, indefinite reviews — frustrating users and eroding trust.
### Rise of Decentralized Exchanges (DEXs)
These ongoing challenges have fueled a growing preference for decentralized exchanges (DEXs), which offer relative safety and transparency. Unlike CEXs, most robust DEXs such as Hyperliquid [HYPE]:
– Do not require Know Your Customer (KYC) procedures.
– Allow users to transfer and control their funds freely.
– Provide verifiable, on-chain transactions accessible to the public.
A market watcher commented:
> “Stop leaving your funds in scammy CEXs. Withdraw all your funds from them, own your assets, and trade on chain.”
### Market Position of MEXC and Future Trends
Despite the backlash, MEXC remains a major player — ranked as the 10th largest centralized exchange by assets according to Coinglass. The exchange even recorded positive inflows in the 24 hours following the controversy.
However, trust issues like these could increasingly push users toward DEXs. The DEX-CEX ratio in spot trading volume reached nearly 30% in June 2023, reflecting decentralized platforms handling a significant share of overall volumes. Since 2024, this ratio has stayed above 10% and continues to grow.
If this trend persists, decentralized exchanges could soon rival or even surpass centralized platforms in popularity and market share.
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**Conclusion**
The MEXC saga underscores persistent concerns over centralized exchange practices and highlights the advantages of decentralized platforms. As users seek more control, transparency, and security, DEXs are poised to gain even greater prominence in the crypto trading ecosystem.
https://ambcrypto.com/mexc-faces-backlash-after-withholding-traders-3m-will-it-regain-trust