Cryptocurrency exchanges are under constant scrutiny to demonstrate both solvency and transparency. In a sector still defined by rapid growth, high volatility, and lingering skepticism after past exchange failures, security reports have become one of the ways for platforms to position themselves as trustworthy custodians of user funds.
Leading crypto exchange MEXC has released its Bi-Monthly Security Report for the months of July-August 2025. The numbers provide clear insights into how exchanges are approaching user protection and fraud detection.
Beyond the headline, the report also illustrates how the industry is evolving in terms of security strategies, user protection, and transparency. The platform’s Insurance Fund reached an all-time high of $559 million in July, while $4,97 million USDT in fraudulent activities was intercepted over the reporting period. Its Proof of Reserves ratio also remained comfortably above 100% across major assets.
Fraud and Market Manipulation Prevention
The report dedicated significant attention to MEXC’s efforts in preventing fraud and market exploitation. Over the two months, MEXC reported restricting over 17,000 collusive accounts and 2,008 bot-trading accounts, indicating its active opposition to market manipulative activities. Collusion in trading can distort market movement, harm liquidity, and create unfair market conditions for retail participants. Similarly, bit-driven trading when used abusively can disrupt order books and undermine market integrity. By highlighting the scale of market exploitation attempts, MEXC seeks to demonstrate its proactive approach to risk monitoring rather than just passive oversight.
Fraud interception provided another layer of insight into MEXC’s security approach. The exchange revealed that it froze nearly $5 million across 48 cases linked to illicit activities. The ability to detect and halt fraudulent flows is important to preserve market integrity on the platform.
Proof of Reserve and Insurance Funds
One of the most scrutinized areas for exchanges is whether they can consistently prove solvency. In light of the FTX collapse in 2022 and subsequent security concerns across centralized platforms, PoR has become a common method of reassuring users that assets are safe and readily redeemable.
MEXC reports show reserve ratios of 129.85% for BTC, 104.05% for ETH, 113.23% for USDT, and 105.74% for USDC as of August 31. These numbers indicate that for each user asset deposited, MEXC holds more than 100% in reserve, providing a liquidity buffer above the required baseline obligations.
The report also revealed that the platform’s Insurance Fund crossed $559 million in USDT in the month of July. Insurance funds are designed to protect traders from negative equity during periods of extreme volatility, especially in the leveraged futures market. When losing positions are liquidated below bankruptcy price, the Insurance Fund steps in to cover the shortfall, ensuring that profitable traders are paid in full without the need for auto-deleveraging.
Industry Implications
The report shows the multidimensional approach required for securing user funds by centralised exchanges. Given the increased scrutiny of CEXs’ activity, users now demand more than just liquidity from these platforms. They want verifiable solvency, responsive support, and transparent communication. Each of the dimensions and layers of security employed by MEXC is likely to become an industry standard over the next couple of months. MEXC’s decision to release detailed security metrics every two months shows a willingness to participate in an accountability trend that is increasingly becoming a norm across the industry. If more exchanges adopt similar practices, the market could move closer to establishing security benchmarks that are necessary for user trust.
