MEXC

MEXC Global publishes proof of reserves after monthlong testing

The report shows high reserve ratios for USDT, USDC, BTC and ETH.

On Feb. 22, cryptocurrency exchange MEXC Global released its proof-of-reserves (PoR) snapshot after 45 days of testing. In a document seen by Cointelegraph, MEXC claims its reserve ratios for Tether (USDT), USD Coin (USDC), Bitcoin (BTC), and Ether (ETH) were 120.70%, 240.18%, 116.50% and 110.53%, respectively, via the Merkle tree method. 

As of the date of the snapshot on Feb. 10, MEXC held 232.4 million USDT, 33 million USDC, 1,869 BTC and 12,472 ETH in custodied user assets. Meanwhile, the total assets held within MEXC wallets for the four cryptocurrencies were 280.6 USDT, 79.4 million USDC, 2177.5 BTC, and 13,785.6 ETH. A spokesperson for MEXC told Cointelegraph:

“MEXC will provide monthly updates on users’ asset data through the Merkle tree. This proof considers strong proof that our users’ assets are available for 1:1 redemption at any time. As the industry becomes more regulated, we may disclose additional data that our users need.”

The spokesperson said that the exchange also plans to establish an “MEXC Investor Protection Fund” on top of existing measures to safeguard users’ assets. Prior to the announcement, MEXC published a list of wallet addresses belonging to the exchange. When asked about regulation, the spokesperson explained that MEXC had obtained money service business licenses in the United States, Canada, Switzerland and Estonia and that “clear regulatory standards are so important for the entire industry.”

While exchanges have welcomed the PoR method as a gauge of financial health, other experts disagree. Jack Graves, a teaching professor of law at Syracuse University, told Cointelegraph Magazine that PoRs do not reveal other key information such as liabilities and leverage. “You can audit how many assets a crypto exchange has on-chain, but how much of it is pledged as collateral? That’s a lot harder to figure out unless you have access to their financial services, books, and records,” he explained. 

The MEXC Reserve Ratio report. Source: MEXC Global

MEXC launches $20M ecosystem fund to support Sei Network

A layer 1 blockchain designed for trading, Sei Network previously raised $5 million in funding in August.

According to a blog post published on Jan. 4, Singapore-based cryptocurrency exchange MEXC will allocate $20 million to support developments on Sei Network. A layer 1 blockchain designed for trading, Sei Network’s stated features include native order matching, frontrunning protection, smart block propagation and 600-millisecond on-chain trade settlement. Leo Zhao, investment manager of MEXC Ventures, commented: 

“AMM [Automated Market Makers] was the dominant market-making method in crypto for the past 2 years. The lack of a more efficient market-making strategy is in large part because of technology restrictions like low speed and smart-contract restrictions. We believe Sei’s customized Layer 1 solution will be a game changer in the industry.”

Last August, Sei Network raised $5 million in a funding round from investors such as Multicoin Capital, Coinbase Ventures, Delphi Digital, Hudson River Trading, GSR, Hypersphere, Flow Traders and others. By then, over 20 decentralized applications had been built in the ecosystem. Sei claims its blockchain can process approximately 22,000 orders per second and has 250,000 testnet users. Similarly, to meet exchange trading specifications, other decentralized solutions such as dYdX chose to migrate their blockchain from Ethereum to Cosmos. Developers said that Ethereum simply couldn’t handle its orderbook of around 1,000 orders per second:

“Decentralized exchanges are also the most underserved application in crypto. They demand a unique level of requirements for reliability, scalability, and speed that no other apps need. If a large exchange goes down for a few moments, it’s catastrophic, but the same downtime is far more tolerable for most other application types.”

MEXC Ventures currently possesses approximately $100 million in assets under management spread across 300 portfolio companies. Its parent company, MEXC exchange, processed around $600 million in total trading volume in the past 24 hours. The firm is known for its perpetual future products, which launched in the fourth quarter of 2018.