Attention: Asian Crypto Scheme MEXC Appeals Against The Revocation Of Estonian License!

The Estonian entity of the crypto scheme MEXC, MEXC Estonia OÜ, has appealed against the revocation of its license in court in Estonia. The appeal reinstated the license. Pending the court’s decision, the license is therefore to be recognized as valid. It remains to be seen whether the court will confirm the FIU’s revocation of MEXC Estonia‘s crypto license.

Short MEXC Narrative

Allegedly, MEXC was founded in Seychelles, East Africa, under the name MXC in 2018 by Microsoft CFO Ryder Junji and a team of financial and blockchain experts. There is only little to no information about the founders.

Until 2022, MEXC was active as MEXC Global and was operated by MEXC Global Ltd, according to the website. According to the website, this was part of the Asian MEXC Group Ltd (www.mxccorp.com). The entire MEXC scheme is opaque. There is no representation of the founders or management. That alone is a red flag.

The Regulatory Scrutiny

On the MEXC website, you will search in vain for information on regulation. No legal entities are named in the User Agreement and Singapore is stated as the applicable jurisdiction. Users are left in the dark about their contractual partner.

You will not find MEXC Estonia OÜ on the website either. You will only find this entity if you have registered as a customer on MEXC and want to buy cryptos with FIAT, either by bank transfer or credit/debit card. You will then be informed that the Estonian MEXC Estonia is acting as the payment agent.

The MEXC scheme also has a legal entity in Lithuania where the former director of MEXC Estonia, Xinran Guo, is a director. This Lithuanian entity is registered as a crypto business in Lithuania.

The MEXC scheme has receives several regulatory warning over the last couple of months:

• In August 2023, the Canadian BC Securities Commission (BCSC) warned against MEXC;
• In September 2023, the Austrian FMA issued a warning against MEXC;
• In October 2023, the German BaFin issued a warning and announced investigations into the MEXC scheme;
• On Nov 17, 2023, the Estonian FIU revoked the license of MEXC Estonia OÜ. The company appealed against the revocation before the competent court in Estonia. Until the court decision, the license has to be deemed as valid.

Even with a currently still valid Estonian crypto license, there are warnings against the MEXC scheme from regulators in various jurisdictions which prove that the scheme is to be regarded as non-compliant. Especially against the background of the Binance case in the U.S., we should take ruthless action against non-compliant crypto schemes.

Maintaining The Red Compliance Rating

In November, we downgraded MEXC to the Red Compliance list due to the warnings but also because of the findings in our own investigations. We have found out that the FIU-licensed crypto service provider MEXC Estonia OÜ was acting as a payment agent for MEXC.

Read our MEXC downgrading report here.

MEXC Estonia processed both bank deposits via SEPA and credit/debit card payments for the crypto exchange and also worked with partners such as Banxa, MoonPay, and Simplex.

Consequently, we were contacted by the Austrian lawyers of MEXC Estonia, the law firm Brandl Talos. They complained about our report and our warning. Initially, they argued that the Estonian MEXC Estonia would not affiliated with the crypto exchange but rather be an independent scheme. It was not hard to provide evidence that MEXC Estonia was indeed pivotal for the MEXC scheme. However, the lawyers then took a different tack, claiming that MEXC Estonia was properly licensed as a crypto service provider in Estonia. Therefore, we should remove this Estonian entity from our reports and warnings.

Like in your previous article, you keep mixing up MEXC ESTONIA OÜ with MX Global Ltd (MEXC) by stating that MEXC Estonia qualifies “as part of the MEXC scheme”. MEXC Estonia holds a license in a member state of the European Union. Thus, there can be no question of an “unclear regulatory situation” regarding MEXC Estonia OÜ. Our client is not involved in any unlawful or unregulated activities and has never been subject to a warning of any regulator globally even if you, once again, imply the opposite.

Statement of the Austrian lawyers of MEXC Estonia (Nov 15, 2023)

Less than 48 hours after the last email from the lawyers (with a threat of possible legal action, of course), the Estonian FIU revoked MEXC Estonia‘s license. The company appealed the regulator’s decision. Thus, for now MEXC Estonia is a licenced Estonian crypto business.

MEXC Key Data

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If you have any information about the MEXC scheme, its operators, and facilitators, please let us know via our whistleblowing system, Whistle42.