As the sophistication of exploitation attacks and crypto fraud grows in complexity, MEXC, major industry player, is ramping up its efforts to position security and transparency at the core of the platform’s infrastructure. In its latest May-June report, the exchange revealed that it froze and recovered over $2.2 million in stolen crypto assets before malicious actors could liquidate them through its trading system. The platform also reported that it reimbursed leverage traders who incurred losses due to forced liquidations over $559 million through its Futures Insurance Fund since the initiative’s inception. This move comes amid an industry-wide rise in advanced financial crime — including deepfake-powered identity fraud, AI-assisted laundering tactics, and increasing abuse of centralized platforms for fund obfuscation.
Rising Fraud Rate, Real-time Response According to the report, MEXC received 709 fraud-related assistance requests over the two months, working with law enforcement agencies across the globe in response to 124 official asset freeze orders to intercept illicit funds. In total, 41 successful asset interception and recovery cases were recorded during the reporting window.
To counter evolving risks and threats, MEXC has invested heavily in on-chain surveillance, account behavior analysis, and cross-border case support. This led to the flagging and restriction of over 46,000 accounts linked to fraudulent and illicit activities tied to fraud rings across Southeast Asia, India, and the CIS region.
The release further revealed the announcement of a $100 million Guardian Fund announced on June 11, 2025. The Fund was launched to compensate users in cases of systemic failures or large-scale security incidents. The exchange has made the wallet address for the guardian fund public to improve appropriation transparency and user trust.
Beyond Fraud, the report noted a sharp increase in user-side transaction errors. MEXC helped resolve over 2,400 cases of mistaken deposits, tag errors, and bridge misroutes, recovering over $1.1 million USDT for users during the reporting period.
Proof-of-Reserves and Solvency Transparency
In addition to its fraud prevention initiatives, MEXC published an updated proof-of-reserves disclosure, showing that its wallet and on-chain balances include 4,083 BTC, 69,234 ETH, and over 2.4 billion in USDT and USDC, exceeding user liabilities. These disclosures align with emerging regulatory frameworks, including the EU’s MiCA Phase II and South Korea’s proposed real-time audit legislation.
The exchange said its reserve reporting is now structured around over-collateralization, a model meant to instill confidence among users and institutional partners. Analysts have pointed to such measures as becoming essential for access to insurance coverage and banking partnerships in 2025 and beyond.
Industry Context
Against the rising regulatory and user expectations backdrop as well as the evolving risk associated with operating centralized exchanges, MEXC’s combined strategy of real-time protection, transparent reserves, and direct user compensation represents a proactive blueprint for how exchanges might secure long-term credibility in a post-FTX era.
As crypto crime becomes more sophisticated, centralized exchanges are being nudged to evolve — not just to meet compliance standards, but to stay relevant to a user base that increasingly expects full-spectrum risk protection.
The full report is available online for independent review.
