Key Points
- Cryptocurrency exchange MEXC is suspected of insolvency following significant withdrawals from its platform.
- MEXC has denied these rumors, asserting its strong financial health and full backing of all assets.
Cryptocurrency exchange MEXC is under suspicion of insolvency, following a noticeable surge in withdrawals from its platform. Users have reported delays in withdrawing their funds, following the withdrawal of approximately $5.5 billion from MEXC in a short period.
MEXC Rebuffs Insolvency Allegations
Recently, MEXC users have faced difficulties when trying to withdraw their funds. This followed a significant withdrawal of funds, leading to MEXC recording outflows of $5.5 billion. This has led to speculation that the crypto exchange may be dealing with insolvency issues.
MEXC has refuted claims of insolvency, labeling them as “false and misleading”. The cryptocurrency exchange has emphasized its “strong financial health”.
A public statement was released by MEXC denying the insolvency rumors. It announced that it would update its Merkle tree data in the future, allowing users to directly verify the reserves. Users were reassured about the safety of their assets.
MEXC asserted that all assets are “fully backed” and supported by Proof-of-Reserves (PoR) showing over 100% coverage. However, data from the blockchain analytics platform CryptoQuant does not corroborate the exchange’s claims. The Bitcoin withdrawals on MEXC have reportedly increased to record highs, leading to doubts about the exchange’s transparency.
Financial transparency analyst Shanaka Anslem has called for the firm to provide verifiable on-chain balances, disclose clear liabilities, and undergo external verification.
Massive Outflows Impact BTC, ETH, and SOL
MEXC is not the only exchange experiencing these massive outflows, but it is the largest. Gemini and OKX have also recorded some significant net outflows in the last 24 hours, according to Coinglass data.
A large percentage of the assets moved were Bitcoin (BTC), Solana (SOL), and Ethereum (ETH).
Renowned crypto analyst Ted Pillows confirmed that several treasury firms have started selling their Ethereum holdings again, indicating a renewed weakness in the market. On October 30, spot Ethereum ETFs recorded $184 million in outflows. BlackRock’s iShares Ethereum Trust ETF (ETHA) alone saw $120 million in outflows.
This puts the ETH price at risk unless it can regain strength above $4,000. At the time of writing, Ethereum was trading at $3,868.74, with a 0.87% increase in the last 24 hours, according to CoinMarketCap data.
MEXC clarified its financial status on Twitter, dismissing unverified rumors and stating that it remains in strong financial health.
