Dramatic increase in crypto fraud cases: MEXC raises the alarm!

Dramatic increase in crypto fraud cases: MEXC raises the alarm!

In the first quarter of 2025, cryptocurrency exchange MEXC has seen an alarming increase in fraudulent trading activities. Between January and March, the number of organized fraud attempts increased by 200% compared to the previous quarter. In total, over 80,000 suspicious trading activities were detected from more than 3,000 fraud groups. The categorization of scams ranges from market manipulation to wash trading to automated trading robots. Such clear statistics illustrate the seriousness of the situation in the digital assets space.

Regional differences are particularly worrying. According to MEXC, India saw the largest increase in fraud cases, with nearly 27,000 accounts flagged as suspicious. There were also 6,404 disputed accounts in the Commonwealth of Independent States (CIS) and 5,603 in Indonesia. MEXC COO Tracy Jin attributes this increase to a lack of knowledge about cryptocurrencies and trading practices. The most common victims are often new users who are unfamiliar with the risks and typical fraud patterns.

Awareness and education

MEXC highlights the urgent need to raise awareness about crypto scams and educate users. Most new users in the affected regions are unaware of common scams in the financial world. This ignorance makes them easy targets for fraudsters, who often use social engineering to lure their victims.

In a broader context, US authorities have launched new measures against market manipulation in the cryptocurrency industry. The U.S. Attorney's Office for the District of Massachusetts has filed first-ever criminal charges against financial services companies for market manipulation and wash trading. A total of 18 people and companies, including four cryptocurrency market makers, are affected. The charges describe these companies engaging in illegal market manipulation to create the appearance of an active market for certain tokens.

Regulatory challenges

The investigation originated from a tip from the SEC that led to further investigations. This included the use of a shell company called NextFundAI, which created a token to communicate with the defendants. As part of this investigation, the perpetrators offered to manipulate the price of the token through wash trading. Authorities argue that there was a fraudulent intent behind these trading activities to artificially increase trading volumes and thus increase interest in the token.

The charges also include wire fraud, which does not require proof that the digital asset involved is a security. In contrast, the charge of conspiracy to manipulate markets requires proof that the token is considered a security, making the burden of proof more difficult for authorities. Some defendants have already pleaded guilty, while others are challenging the government's legal theories in court.

These are not just isolated cases. Experts expect that these investigations are just the beginning of a series of similar actions in the digital assets space. The steps taken could have long-term implications for the regulation and supervision of the entire cryptocurrency market. MEXC and the US authorities are therefore faced with the challenge of maintaining the integrity of digital trading markets while protecting users.

For more information about the fraud cases, read the report Cointelegraph and the legal measures National Law Review.