MEXC’s $100M Fund Raises Stakes for Crypto Exchange Security

Victoria, Seychelles, June 11, 2025— Crypto exchange MEXC has launched a $100 million user protection fund to safeguard users against platform breaches, hacks, and technical failures, a move that is redefining the competitive landscape of the cryptocurrency exchange industry, sources told Cointelegraph.

Setting a New Security Benchmark

MEXC’s fund, backed by real-time wallet transparency through publicly accessible addresses on its website, comes at a pivotal moment for the crypto sector. With $1.6 billion stolen in Q1 2025, including a $1.5 billion exploit targeting centralized exchange Bybit, the industry faces unprecedented scrutiny.

MEXC’s fund, equivalent to 2.5% of its $3.98 billion daily trading volume, positions the exchange as a leader in user protection, challenging giants like Binance, Coinbase, and Kraken to elevate their security measures or risk losing market share.

“MEXC is setting a precedent that others will struggle to ignore,” said Tracy Jin, MEXC’s chief operating officer. The fund’s design prioritizes rapid compensation for verified incidents, managed by an internal team of risk control, compliance, and security specialists. This proactive approach contrasts with slower, traditional insurance models, potentially pressuring competitors to adopt similar frameworks to retain user trust in an era of escalating cyber threats.

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Competitive Pressure on Industry Leaders

The industry is already feeling the impact of the fund's launch. Binance, which mitigated a $330 million Bitcoin scam in April 2025 by freezing $7 million, relies on its Secure Asset Fund for Users (SAFU) but has not matched MEXC’s transparency or scale.

Coinbase faces legal battles and growing user skepticism as it recovers from a $400 million breach in May 2025 that exposed 69,461 users’ data. MEXC’s transparent fund portal, detailing operations and compensation cases, could siphon users from these platforms, particularly in fraud-prone regions like Southeast Asia, where MEXC reported a 200% spike in fraud attempts in Q1 2025.

“Exchanges that fail to innovate on security will lose ground,” said blockchain analyst Sofia Mendes. “MEXC’s fund is a bold signal to users that their assets are a priority.” As centralized exchanges accounted for 92% of 2025’s crypto hack losses, MEXC’s initiative may spark a broader industry shift, compelling competitors to invest heavily in user protection or face declining confidence in an increasingly volatile market.

Did you know?
Centralized exchanges faced 78% more hack-related losses in Q1 2025 compared to Q4 2024, highlighting the urgency for robust user protection funds.

User Migration and Market Share Dynamics

MEXC’s fund could accelerate user migration from less secure platforms, reshaping market dynamics in 2025. Smaller exchanges, lacking the resources to establish comparable funds, may struggle to compete, while larger players face pressure to allocate significant capital to match MEXC’s offering.

For instance, KuCoin, which reported a $120 million loss from a phishing attack in March 2025, has no equivalent protection mechanism, potentially driving its user base toward MEXC. The fund’s transparency, allowing users to monitor wallet balances in real-time, further differentiates MEXC, appealing to retail investors who prioritize safety over low fees or high leverage.

Long-Term Implications for Industry Standards

MEXC’s initiative may catalyze long-term changes in how crypto exchanges approach user protection. By integrating real-time transparency and rapid compensation, MEXC is addressing immediate security concerns and setting a blueprint for industry-wide standards.

Analysts predict that by Q3 2025, at least three major exchanges may announce similar funds to counter MEXC’s competitive edge. Additionally, MEXC’s exploration of third-party auditing partnerships could inspire a hybrid model of in-house and external oversight, further elevating trust and accountability across the sector.