Concerns are mounting in the crypto community over the financial health of the Seychelles-based cryptocurrency exchange MEXC. Despite the platform’s updated Proof-of-Reserve (PoR) report, investors remain unconvinced.
Massive Outflows Hit MEXC
The rumors stemmed from a high-profile dispute involving pseudonymous trader The White Whale, whose $3.1M account was frozen for months over alleged “suspicious activity”.
The case quickly fueled broader fears of account freezes, withdrawal delays, and mounting liquidity troubles across the exchange. Soon after, posts began appearing about possible MEXC insolvency.
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Last Friday, MEXC Chief Strategy Officer Cecilia Hsueh acknowledged the failure and confirmed that the funds had been released.
That same day, market analyst J.A. Maartun highlighted the situation, sharing a chart showing a sharp spike in withdrawal activity on MEXC. While he noted that withdrawal volumes were “exceptionally high,” similar spikes had been recorded earlier in the year.
According to data from DeFiLlama, MEXC recorded over $2.3 billion in outflows within 24 hours and more than $2.37 billion over the past month, which is the largest negative figures among the top 10 global crypto exchanges.
DeFiLlama’s data also indicates that MEXC currently holds around $4.28 billion in reserves, roughly 1.82 times its liabilities. In theory, this suggests the exchange still possesses nearly double the assets needed to cover its obligations.
Proof-of-Reserves Post Fails to Convince
Earlier today, MEXC posted a snapshot of its reserve holdings on X, taken on November 2, 2025, at 00:00 UTC+8. The exchange stated that its reserves in USDT, USDC, BTC, and ETH exceed customer deposits, meaning all user funds are “fully backed.”
However, MEXC has not yet to published an independent Proof-of-Reserves audit verified through a Merkle Tree system. Without such verification, it remains unclear whether the claimed reserves truly exist on-chain.
The published Proof-of-Reserves screenshot failed to reassure the crypto community, with many voices now urging users to withdraw their funds from the exchange.
Why This Matters
MEXC’s capital flows have turned sharply negative, signaling a loss of user confidence and liquidity pressure. If outflows continue at this pace, the exchange could face a short-term liquidity crunch.
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People Also Ask:
Proof of Reserves is a transparency mechanism used by crypto exchanges to show that they hold enough assets to cover all customer deposits. It’s often verified using cryptographic methods like a Merkle Tree audit.
Look for independent PoR audits verified on-chain, transparency dashboards (like DeFiLlama), and clear communication from the exchange about asset-liability ratios.
Common warning signs include withdrawal delays, frozen accounts, missing or vague reserve reports, and unusually high outflows over a short period.
