Crypto exchange MEXC has established a $100 million user protection fund aimed at covering losses from major security breaches, technical failures, or infrastructure issues. The fund is designed to respond swiftly to incidents such as hacks, critical vulnerabilities, or large-scale exploits, providing compensation to affected users without the delays typical of insurance claims.
Tracy Jin, COO of MEXC, emphasized that this initiative is focused on delivering real safeguards rather than just promises. Unlike traditional insurance, the fund can be deployed immediately after an incident is confirmed, and an internal team comprising risk, compliance, and security experts will determine compensation based on the extent of losses.
To enhance transparency, MEXC has published wallet addresses linked to the fund and will maintain a portal for ongoing updates about fund balances, coverage scenarios, and compensation cases. While the fund is currently managed internally, MEXC is exploring bringing in independent auditors and risk control firms to oversee the process.
The $100 million reserve represents approximately 2.5% of MEXC's daily trading volume, with the exchange handling just under $4 billion in spot volume over the past 24 hours (data from CoinMarketCap). This move comes amid rising crypto platform attacks, with Q1 2025 losses reaching an estimated $1.6 billion according to blockchain security firm PeckShield, including a major exploit on Bybit linked to North Korea's Lazarus Group.
MEXC has reported a 200% increase in fraud attempts during the first quarter, prompting the exchange to enhance defenses and user protection. The protection fund also aligns with industry trends toward greater asset security and transparency, potentially influencing regulatory policies and technological standards across the crypto exchange sector.