Exchange opens legal dialogue with Treasury officials as blockchain investigator ZachXBT criticizes rival platform bans and questions federal data
Cryptocurrency exchange MEXC Global has opened formal legal communication with the U.S. Treasury Department’s Financial Crimes Enforcement Network, seeking to resolve federal allegations that the platform facilitated more than $16 billion in illicit transactions.
MEXC Chief Executive Officer Vugar Usi said Monday that FinCEN confirmed receipt of the company’s formal request to cooperate through U.S. legal counsel. The engagement comes as prominent independent blockchain investigator ZachXBT publicly questioned the government’s laundering estimates and criticized rival exchanges for moving swiftly to block user transfers.
Formal Engagement with FinCEN
Usi announced on social media platform X that MEXC retained top-tier U.S. law firms to facilitate discussions with federal regulators, maintaining that platform operations remain fully functional.
“FinCEN confirmed receipt of our written request on Monday morning,” Usi said. “We are ready to fully cooperate. The platform continues to operate normally. Deposits, withdrawals and trading are fully functioning.”
Usi stated that the company has established a strategy to address the allegations directly and committed to providing periodic updates as discussions proceed.
Blockchain Sleuth Challenges Allegations
The exchange’s outreach coincided with public scrutiny from pseudonymous blockchain researcher ZachXBT, who questioned the justification for rival offshore exchanges severing ties with MEXC and cast doubt on the scale of the government’s figures.
“Does it concern anyone else about how all of these other offshore CEXs with little to no US presence rush to immediately cut off MEXC users from transferring assets?” ZachXBT wrote on X. “Who is actually being protected by it.”
While conceding that MEXC historically maintained a “quite relaxed” anti-money laundering and identity verification framework, ZachXBT argued that the $16 billion illicit volume cited by FinCEN appeared overstated and called for comparative industry data.
“Starts to feel a bit of gov’t overreach for cases like HTX or MEXC when much worse offenders like Kucoin are not being sanctioned,” ZachXBT said.
Usi replied directly to the researcher, stating that MEXC is focused on achieving a constructive resolution with regulators while citing internal compliance improvements enacted since he assumed leadership earlier this year.
Rival Exchanges Enforce Restrictions
The dialogue unfolds as centralized exchanges move to isolate MEXC liquidity. On Nov. 10, Binance barred all transactions involving MEXC, announcing that withdrawal requests to MEXC addresses will be rejected and interacting accounts risk suspension under terms-of-service reviews. (Read More: Binance Halts Transfers Linked to MEXC Global Following US Money Laundering Action)
The move followed a Nov. 7 warning from OKX founder Star Xu, who advised customers against transferring funds directly between the two platforms after users reported incoming deposits being flagged and placed under risk holds. (Read More: OKX Warns Against MEXC Transfers as CEO Defends Solvency After US Action)
Blockchain tracking metrics registered more than $120 million in net capital outflows from MEXC in the immediate aftermath of the U.S. announcement, though analytics firm Elliptic subsequently restored MEXC to its standard exchange classification after removing a temporary risk designation.
Regulatory Background
FinCEN issued an order on Nov. 6 under Section 9714(a) of the Combating Russian Money Laundering Act designating MEXC a primary money laundering concern. The agency alleged the exchange processed transactions tied to Russian sanctions evasion, Iranian crypto brokers and ransomware operations between May 2021 and May 2026.
The pending measure will prohibit covered U.S. financial institutions from transmitting funds to or from MEXC once published in the Federal Register. The order is not an Office of Foreign Assets Control sanctions designation and does not freeze customer balances on the exchange.
Disclosure: AI is used to assist in developing this article.
This article is published on BitPinas: MEXC Opens Dialogue With US FinCEN as ZachXBT Questions $16B Illicit Volume Claims
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