Binance has moved to block transfers to and from MEXC after the US Treasury, through FinCEN, designated the exchange a “primary money laundering concern” and accused it of handling at least $16 billion in illicit funds. Treasury has not publicly explained how it arrived at that total, leaving a major part of the allegation unsubstantiated in the public record.

The exchange said users connected to MEXC could face account restrictions while activity is reviewed. MEXC, meanwhile, said its operations remain normal and that user assets are safe.

Treasury action prompts Binance response

FinCEN’s designation bars US financial institutions from sending funds to or from MEXC and could also disrupt US dollar flows that pass through foreign banks. According to the source report, Binance responded by rejecting transfers involving MEXC and tightening related compliance checks.

The measure was described as immediately applicable, although the underlying order is set to take effect 30 days after publication in the Federal Register. The action places MEXC in a category FinCEN has previously used against Bitzlato.

What Treasury alleged against MEXC

Treasury said MEXC moved nearly $1.5 billion tied to Russian sanctions evasion and about $1 billion connected to Iranian exchanges since May 2021. It also cited MEXC’s dealings with sanctioned entities including Garantex and its successor, Grinex.

The broader accusation is that the exchange processed at least $16 billion in illicit funds. Treasury also noted that MEXC was handling more than $1 billion in daily volume as of September, underscoring the scale at which the platform was operating when the allegations were made.

Questions over the $16 billion figure

Crypto investigator ZachXBT said MEXC has had weaker customer checks, but challenged the headline number used by Treasury. He called for the underlying data and for comparable figures across other large exchanges, arguing that hundreds of millions to billions in illicit flows could likely be identified elsewhere as well.

He specifically said KuCoin was a worse offender, framing his criticism around consistency and evidence rather than denying that MEXC had compliance shortcomings. As of the report, it was still unclear whether Treasury would publish the data supporting its estimate.

What happens next

For now, Binance users attempting to move funds to or from MEXC may see those transfers rejected, and some linked accounts could be restricted while reviews are carried out. MEXC has maintained that normal operations continue despite the US action.

The next confirmed step is the publication of the order in the Federal Register, after which the 30-day timetable for the rule to take effect begins. Whether Treasury releases a fuller breakdown of the alleged $16 billion in illicit funds remains an open question.

Source: beincrypto.com