Crypto exchange MEXC cracks down on market manipulation, freezes 1,500 accounts

Cryptocurrency exchange MEXC has cracked down on over 1,500 accounts tied to a coordinated market manipulation scheme after internal investigations revealed suspicious activity in Vietnam and the Commonwealth of Independent States (CIS).

Some of these accounts were trading over $20,000,000 daily, prompting concerns about systemic risks to crypto market infrastructure.

The exchange’s detection of large-scale, coordinated behaviour follows a 60% surge in malicious trading activity between January and February 2025 compared to late 2024.

The scale and sophistication of these groups, many using institutional-level tools and infrastructure, mark a shift from retail-level manipulations to organised, quasi-institutional strategies.

MEXC has rolled back fraudulent trades, suspended affected accounts, and introduced stricter surveillance measures to prevent further abuse.

It also introduced a new measure to curb such activities.

The measure involves a specialized monitoring system for suspicious accounts.

Participants engaged in potentially manipulative schemes are placed under enhanced surveillance for a minimum of 30 days.

During this period, their activity is analyzed for patterns of malicious intent or collusion.

If such behavior persists, the account is blocked and referred to the internal investigation team.

Tactics included spoofing, layering

According to MEXC’s official blog, the groups operated with advanced trading methods including self-trading, spoofing, layering, front-running, and quote stuffing.

These tactics are often used to deceive other market participants by creating fake demand or supply, thereby influencing token prices.

The CIS region and Vietnam were highlighted as the main hubs for these operations.

MEXC said its team identified two distinct groups responsible for this coordinated activity, with evidence suggesting they were leveraging institutional-grade liquidity access and algorithmic strategies typically reserved for high-frequency trading firms.

These developments underline the growing complexity of illicit crypto behaviour.

Bybit hack, DeFi issues raise concerns

The timing of MEXC’s announcement follows an industry-wide discussion about crypto security risks.

Earlier last month, the $1.5 billion Bybit hack raised alarms across the sector, prompting concerns that without stricter oversight, such incidents could become more frequent.

At the same time, suspicious trading volumes on decentralised protocols like eXch and THORChain have come under scrutiny, with reports suggesting that a large share of their activity is linked to North Korea.

These revelations put further pressure on the decentralised finance (DeFi) sector and exchanges alike to improve transparency and tighten risk controls.

While some in the industry fear increased regulation, recent events have shown that a lack of oversight may pose a greater long-term threat to market integrity.

Institutional-level abuse poses systemic risk

MEXC described this trend as a turning point, noting that manipulation techniques now mirror those seen in traditional financial markets.

The rise of quasi-institutional level abuse introduces systemic risks not only to individual platforms but also to the stability of the broader crypto market.

The exchange stated that while individual users have historically been the source of market manipulation, organised groups are now using automation, infrastructure access, and liquidity tools in a way that mimics hedge fund-like behaviour.

As crypto adoption spreads, exchanges may face mounting challenges in preventing these new, more complex threats without significant industry coordination or regulatory intervention.

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