MEXC Clears the Air on Kaspa Controversy – Here's Why the Community Shouldn't Be Worried

Last week, we published 2 articles about the details from the Kaspa community concerns regarding MEXC's suspension of Kaspa withdrawals

Last week, we published 2 articles about the details from the Kaspa community concerns regarding MEXC’s suspension of Kaspa withdrawals, suspected price manipulation, and lack of transparency.

However, we got in touch with MEXC’s team who actually addressed all concerns and here’s why Kaspa community should stay calm.

Technical Challenges Behind the Withdrawal Suspension

When MEXC paused Kaspa withdrawals on March 26th, it triggered alarm within the community. Many users expressed frustration over the sudden suspension, with Kaspa Report criticizing the exchange for not providing advanced notice to traders before restricting withdrawals.

In response to these concerns, MEXC issued an official statement explaining the technical reasons behind the suspension. As one of the first major exchanges to list Kaspa, MEXC handles exceptionally high transaction volumes, particularly from small mining-related deposits. This led to an accumulation of numerous micro UTXOs (unspent transaction outputs) and created processing bottlenecks and delays in transaction consolidation and withdrawals.

To address these issues long-term, MEXC’s technical team implemented a comprehensive system architecture redesign. This included migrating core functions like UTXO management from node wallets to their proprietary management system. The upgrade aimed to significantly improve processing capacity and service stability. During this essential maintenance, temporary restrictions on deposit and withdrawal services were necessary. This explains the periodic suspensions of KAS withdrawals. They concluded: “We understand the frustration caused by delayed withdrawals, and we deeply appreciate your patience and continued trust. ”

Asset Backing and Market Behavior Clarifications

Some community members raised questions about MEXC’s asset backing and suggested Kraken as a more transparent alternative. However, MEXC has rejected these comparisons, noting that they appear to be attempts to discredit the exchange without presenting objective supporting data.

The Kaspa price movement also became a point of contention. Prior to MEXC’s withdrawal halt, Kaspa had climbed nearly 50%. When the withdrawals stopped, the price flattened out. This led some community members to suspect something fishy was going on.

MEXC clearly stated that no one has shown any real proof of market manipulation. An MEXC spokesperson said they don’t censor feedback and actually want to hear from users. “We’re open to criticism if it’s based on facts,” they said. Their rules aim to stop fake information and scams, not honest discussion.

MEXC talks regularly with many crypto communities, including Kaspa’s. They want users to share real concerns through proper channels.

This whole situation shows the ongoing debate about centralized exchanges in the crypto world. Issues with transparency and communication happen across the industry, not just in this case.

MEXC turned Kaspa withdrawals back on March 28 after finishing their system upgrade. The exchange says they needed the pause to fix technical problems caused by too many small mining deposits overloading their processing system.

While the suspension was just for technical reasons, it caused speculation and emotional reactions online – many based on incomplete information.