MEXC stated that it has dismantled a large-scale group of market manipulators engaged in various malicious activities, including proprietary trading, spoofing, and front-running.
Concerns about the presence of institutional actors
The cryptocurrency exchange MEXC recently announced that it had dismantled a large-scale, coordinated group of market manipulators engaged in proprietary trading, spoofing, layering, front-running, and quote stuffing. According to the exchange, a total of 44 users from Vietnam and 138 from the Commonwealth of Independent States (CIS) were suspended, while 168 Vietnamese accounts and more than 1,500 accounts in the CIS countries were frozen.
In a March 25 blog post, MEXC’s investigation stated that the “presence of large groups and institutional actors in these manipulations” was concerning. The exchange added that its data shows a 60% increase in this coordinated malicious trading activity from January to February of this year.
MEXC’s disclosure came just weeks after a report by Kaiko Research highlighted how increasing incidents of market manipulation in decentralized finance (DeFi) are scaring away institutional investors. As reported, these incidents could attract the attention of regulators, who could respond with regulations that harm the DeFi ecosystem.
Meanwhile, MEXC stated that the market manipulators’ use of institutional access to liquidity, infrastructure, and algorithmic strategies to execute serial schemes on a massive scale introduces a new layer of risk.
“We are witnessing the transformation of manipulation from retail to group and even quasi-institutional levels, posing systemic risks to both individual exchanges and the market infrastructure as a whole,” MEXC stated in the blog post.
The exchange disclosed that some of the accounts involved had daily trading volumes exceeding $20 million. In addition, the participants’ algorithms allegedly caused short-term distortions in individual pairs, with volatility increases of up to 120%. MEXC noted that, had these actions not been detected earlier, they could have led to mass liquidations and distortions in the asset’s market price within minutes.
In addition to blocking the flagged accounts, MEXC plans to share the results of its internal investigation with relevant authorities and regulators. Tracy Jin, COO of MEXC, stated that the case points to the next wave of threats to digital markets. Jin warned that without proper synchronization between platforms and regulators, the industry faces a new round of market instability.
[newsletter_form lists="1"]
