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MEXC said it has liquidated a large-scale group of market manipulators engaged in various malicious activities, including self-trading, spoofing, and front-running.
Presence of Institutional Actors Draws Concern
Cryptocurrency exchange MEXC recently announced that it liquidated a large-scale, coordinated group of market manipulators engaged in self-trading, spoofing, layering, front-running, and quote stuffing. According to the exchange, a total of 44 users from Vietnam and 138 from Commonwealth of Independent States (CIS) countries were stopped, while 168 Vietnamese accounts and more than 1,500 accounts in CIS countries were frozen.
In a March 25 blog post, MEXC’s investigation found the “presence of large groups and institutional-level actors in these manipulations,” which it described as concerning. The exchange added that its data from January to February this year indicates a 60% increase in such coordinated malicious trading activities.
The revelation by MEXC came just weeks after a Kaiko Research report highlighted how the growing incidents of market manipulation in decentralized finance (DeFi) are pushing away institutional investors. As reported by Bitcoin.com News, these incidents may attract the attention of regulators, who could respond by imposing rules detrimental to the DeFi ecosystem.
Meanwhile, MEXC stated that the market manipulators’ use of institutional-level access to liquidity, infrastructure, and algorithmic strategies to execute serial schemes at scale introduces a new layer of risk.
“We are witnessing the transformation of manipulations from the retail to the group and even quasi-institutional level, which carries systemic risks for both individual exchanges and the market infrastructure as a whole,” MEXC explained in the blog post.
The exchange disclosed that some of the accounts involved showed daily trading volumes exceeding $20 million. Furthermore, the participants’ algorithms reportedly created short-term distortions on individual pairs, with an increase in volatility of up to 120%. MEXC noted that had these actions not been identified earlier, they could have led to mass liquidations and distortions of the asset’s market price within minutes.
In addition to suspending the flagged accounts, MEXC plans to share the findings of its internal investigation with relevant authorities and regulators. Tracy Jin, COO of MEXC, stated that the case is indicative of the next wave of threats to digital markets. Jin warned that the industry faces a new round of market instability without proper synchronization between platforms and regulators.