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Crypto exchange MEXC has denied claims that it “steals” customers’ profits back when they have unusually large profits. In a recent X post, the exchange stated that “users engaging in normal trading activities will not be affected” by its clawback policies, which it claims are in place to protect the exchange against alleged market manipulation. Meanwhile, some customers say that funds were unjustly deleted from their accounts on the exchange.
MEXC is the 11th-largest centralized crypto exchange by trading volume, <a href="https://coinmarketcap.com/rankings/exchanges/" target="_blank" rel="noopener nofollow">according to</a> CoinMarketCap, with approximately $1.3 billion worth of spot trading volume each day. The exchange is especially well known for its perpetual futures trading platform, which does over $7 billion in daily volume.
In a conversation with Cointelegraph in February, an MEXC user with the screen name “Al Gore Rhythms” claimed that MEXC froze his account and deleted some of his funds after several crypto perpetual futures trades. According to him, his trades of BONK, ICP (<a href="https://cointelegraph.com/internet-computer-icp-price-index">ICP</a>), SATS and GROK altcoin perpetuals were up by 380% to 2,200% when his account suddenly stopped working. Login attempts then produced error messages stating that his account had been restricted due to “risk control.”
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 <img src="https://s3.cointelegraph.com/uploads/2024-03/31566c0f-e8a5-44ca-b341-731cd9dfb9d3.png" alt="" title="">
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 MEXC error message. Source: Al Gore Rhythms
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According to the user, he later discovered that an alleged amount of $33,658 had been deducted from his spot account. This deduction was allegedly not recorded on his transaction history, although his balance showed that it had been reduced from $75,054.54 to $41,396.54.
Seeking help from customer service, Al Gore Rhythms opened a ticket asking why the funds had been deducted. In response, MEXC representatives allegedly told him that the exchange had “taken measures to recover the losses incurred” due to “abnormal trading activities” from his account.
<figure data-ct-non-breakable="true">
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 Alleged email from MEXC. Source: Al Gore Rhythms
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In response, AI Gore Rhythms asked for a transaction record showing the amount deducted, which he told the exchange he needed for “tax purposes.” He claims the exchange refused to give him this information and later deleted his entire transaction history. The user showed Cointelegraph a video of his transaction history, which displayed only blank pages. He also produced what he claimed was a screenshot of the transaction history from before it was deleted.
Cointelegraph could not independently confirm the allegations, or whether the video and screenshot were from the same account.
Related: <a href="https://cointelegraph.com/news/risk-on-blast-suspected-rug-pull-on-blast-after-1m-presale">RiskOnBlast suspected to be first rug pull on Blast after $1M presale</a>
According to AI Gore Rhythms, he sought further information from MEXC’s customer service and was told that the funds were taken to cover “the losses of the mexc.”
<figure data-ct-non-breakable="true">
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 Alleged conversation between customer service and user. Source: Al Gore Rhythms
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Another user, Coach K Crypto, also claims that MEXC deducted funds from his account unjustly. According to a Feb. 27 X post from The Gold Pod co-host Mason Versluis, Coach K Crypto <a href="https://twitter.com/MasonVersluis/status/1762690244464541740" target="_blank" rel="noopener nofollow">claimed</a> that $330,000 was taken from his MEXC account “due to abnormal profit,” which the MEXC customer service representative allegedly called a “crawback,” seemingly mispelling “clawback.”
In a reply to the post, MEXC <a href="https://twitter.com/MEXC_Official/status/1762709175598199295" target="_blank" rel="noopener nofollow">claimed</a> that the exchange’s risk control policy does not affect ordinary users who engage in “normal trading activities.” A spokesperson for the exchange also said there is an appeals process for users who feel this policy has led to unjust deductions.
Cointelegraph was also contacted in February by a different MEXC user from Pakistan who claimed the exchange had frozen his trades and caused them to become liquidated. According to the user, who wished to remain anonymous, the freeze stopped him from closing his trade, resulting in trading losses that otherwise would have been prevented. 
He claimed the exchange offered to pay him $3,000 in compensation in exchange for deleting his X posts that complained about the incident. However, the exchange allegedly withdrew this offer when his posts aged and stopped receiving as many views. This user did not produce a screenshot of the offer being made.
Related: <a href="https://cointelegraph.com/news/hong-kong-sfc-warning-impersonator-crypto-exchange-mexc">Hong Kong issues warning over imposter crypto exchange posing as MEXC</a>
Crypto trader Hashmoney told a similar story in a Jan. 4 thread on X. Hashmoney&nbsp;<a href="https://twitter.com/culturexbt/status/1742894092902961348" target="_blank" rel="noopener nofollow">claimed</a> that when their account was frozen, “I was not able to hedge my positions, reduce the margin or do anything at all.” In response, they “requested the customer support that they may keep withdrawals restricted but shall at least allow me to trade so I can prevent my balance from liquidating.” 
However, MEXC customer service allegedly only allowed Hashmoney to add to their position for 30 minutes and did not allow them to close it out. As a result, “My whole futures account was liquidated taking away 11000$+ and [the] rest was deducted in daily fees as I was not allowed to hedge my positions,” the user wrote. Hashmoney alleged that they still had $600 remaining in the account but could not withdraw it due to the freeze.
MEXC <a href="https://twitter.com/MEXC_Official/status/1742932397220634637" target="_blank" rel="noopener nofollow">replied</a> to Hashmoney’s thread, claiming an investigation was underway and asking the user to contact customer service for an update. Hashmoney claimed they would update the thread when they obtained a resolution. No update has since been posted at the time of publication.
Cointelegraph contacted MEXC for comment but did not receive a response by the time of publication. A blog post on the exchange’s official website <a href="https://support.mexc.com/hc/en-001/articles/360047148511-MEXC-How-To-Handle-Abnormal-Trading-Behaviors" target="_blank" rel="noopener nofollow">claims</a> that “abnormal trading behavior” consists of activities such as placing multiple orders and canceling them (often called “spoofing”) or using multiple accounts to artificially inflate volume by trading between them. Al Gore Rhythms claimed that he did not own multiple accounts and did not engage in spoofing.
Similar allegations against MEXC <a href="https://cointelegraph.com/news/traders-report-frozen-assets-account-blocks-mexc">were made by multiple users</a> in December. At the time, MEXC claimed that the allegations were misinformation. “Social media is rife with misinformation, and certain individuals purposely distort facts for personal agendas,” a representative stated. The representative also claimed that clawbacks are only implemented after “strict review, in accordance with user agreements.”

MEXC says ‘clawbacks’ only affect delinquent traders as users report missing funds

Cointelegraph

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