MEXC says the ‘clawworks’ only affect rogue traders when users report missing money.

Crypto exchange MEXC has denied claims it “steals” customers' profits when they make unusually large profits. In a recent post by X, the exchange stated that its clawback policy, which is designed to protect the exchange from market manipulation, “will not affect users who engage in normal trading activities.” Meanwhile, some customers are reporting that funds have been improperly withdrawn from their accounts at the exchange.

MEXC is the 11th largest centralized crypto exchange by transaction volume according to CoinMarketCap, with a daily spot trading volume of approximately $1.3 billion. The exchange is particularly known for its sustainable futures trading platform, which transacts more than $7 billion daily.

In a conversation with Cointelegraph in February, a MEXC user with the screen name “Al Gore Rhythm” said that MEXC banned his account and withdrew some of his funds after multiple crypto-permanent futures transactions. According to him, his eternal trading of BONK, ICP (ICP), SATS and GROK altcoins rose from 380% to 2,200% when his account suddenly stopped working. Login attempts then generated error messages stating that the account had been restricted due to “risk control”.

According to the user, he later discovered that $33,658 in suspicious funds had been deducted from the site. It is said that this deduction was not recorded in the transaction history.

Seeking help from customer service, Al Gore Rhythms opened a ticket asking why the money was deducted. In response, representatives of MEXC said that the exchange has taken steps to recover the losses due to “unusual trading activities” from the account.

In response, AI Gore Rhythms requested a transaction record showing the reduced amount, which it said was a transaction it wanted for “tax purposes.” The exchange refused to provide him with this information and later deleted his entire trading history. The user showed Cointelegraph a video of his transaction history, showing only blank pages. He also produced what he said was a screenshot of the transaction history before it was deleted.

Cointelegraph was unable to independently verify the allegations, or that the video and script came from the same account.

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According to AI Gore Rhythms, he sought further information from MEXC's customer service and was told that the money was taken to cover “Mexi's losses”.

Another user, Trainer K Crypto, also claimed that MEXC improperly deducted funds from his account. According to a Feb. 27 post by X from The Gold Pod co-host Mason Versluus, Coach K Crypto had $330,000 taken from his MEXC account “due to normal profits,” which a MEXC customer service representative called a “refund.” It looks like a typo.

In response to the article, MEXC said the exchange's risk management policy does not affect ordinary users engaged in “normal business activities.” An exchange spokesperson also said there is an appeals process for users who feel the policy has resulted in unfair deductions.

Cointelegraph also reported that in February, another MEXC user from Pakistan reported that the exchange had blocked his trading and caused it to disappear. According to the user, who wished to remain anonymous, the freeze prevented him from closing his business, causing business losses that could have otherwise been prevented.

He said the exchange would pay him $3,000 in damages for deleting his X posts complaining about the problem. But the exchange reportedly canceled this offer when the posts got old and stopped getting many views. This user has not provided a screenshot of the offer being made.

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“I couldn't block my position, reduce my margin or do anything,” crypto trader Hashmoney said in a similar story on X. Hashmoney on January 4 when their account was frozen. In response, they asked customer support to limit withdrawals but at least allow me to trade without depleting my balance.

However, MEXC customer service reportedly only allowed Hashmoni to add to their site for 30 minutes and refused to close it. Because of this, “My entire futures account was canceled with $11000+ taken. [the] I was not allowed to hedge my position so my leave was cut off every day,” the user wrote. Hashmoni said he still had $600 left in his account but could not withdraw it due to the shutdown.

MEXC responded to the Hashmoni thread saying an investigation is underway and asking the user to contact customer service for an update. Hashmoney said they will update the thread when they find a solution. No updates have been posted since 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 says the “unusual trading behavior” includes actions such as placing and canceling multiple orders (often called “fraud”) or using multiple accounts to trade between them to increase volume. Al Gore says Rhythms does not own multiple accounts and is not involved in fraud.

Similar allegations against MEXC were filed by several users in December. At the time, MEXC said the charges were misinformation. “Social media is full of misinformation, and some individuals will deliberately distort the facts for a personal agenda,” said one representative. The representative also said that claves will only be implemented after “rigorous review based on user agreements.”