Written by: Golem (@web 3_golem)
On the morning of August 13, the US stock token trading platform MyStonks announced that its 24-hour trading volume exceeded 97 million dollars. According to CoinGecko data, MyStonks's 24-hour trading volume has surpassed that of Uniswap V2 on Ethereum, ranking in the top 25 in DEX 24-hour trading volume leaderboard. This not only marks the rapid expansion of the US stock token sector but also signifies that MyStonks is gradually taking the lead in the field of US stock token trading platforms.
However, on the afternoon of August 13, a user posted on the X platform claiming that the MyStonks platform had misappropriated their deposit of 6.2 million dollars, closed the user's withdrawal channel, and dispersed the funds. This incident quickly attracted public attention and raised concerns about the security of the MyStonks platform, even leading some users to panic withdraw their funds.
In response, MyStonks officials quickly responded, stating that this was due to recent enforcement requests from US regulatory agencies regarding a single user, involving multiple special investigations related to anti-money laundering, fraud rings, drug trafficking, sanctions evasion, and suspicious activity reports (SARs), but it does not affect other users' deposit and withdrawal operations; the compliance department of the platform has contacted the involved user through secure channels and guided them to complete the relevant compliance information submission.
In addition, MyStonks officials revealed that after users posted 'rights protection posts,' the website simultaneously received over 23 million DDoS attacks, as well as a large number of complaints and reports. To address user concerns and provide a better understanding of the full picture of the event, MyStonks held a Space on the evening of August 13, where founder Bruce J provided a detailed explanation of the incident, directly facing community questions, covering urgent issues such as security compliance and being identified as a phishing site by OKX, and also introduced the platform's future product plans. Odaily Planet has summarized the key contents of the Space for readers' reference.
Response to the '6.2 million dollars' incident
Bruce J: The '6.2 million dollars' incident actually happened a week ago. I think such things happening at any crypto exchange is quite normal.
Since we formed our team in 2024, we have insisted on following a compliant path. Therefore, among all US stock token platforms, our compliance procedures should be the most complete, whether it is the MSB license from the US FinCEN (Financial Crimes Enforcement Network) or the SEC's registration for security token offerings (STO), both of which can prove this point. Currently, our compliance team is not inferior to that of a traditional CEX in terms of personnel, and all are based in the United States.
Regarding the issue of blocked withdrawals of 6.2 million dollars over the past two days, we take this opportunity to explain the SEC's compliance requirements. Since last month, some addresses that have come from mixers have gradually started depositing into the MyStonks platform. Last week, we received an enforcement request from law enforcement agencies. The specific content of the enforcement request is not convenient to disclose to the market due to a confidentiality order. However, the topics involved are similar to those of other exchanges, such as investigating whether users are engaged in illegal activities, terrorism, human trafficking, money laundering, and fraud, etc.
When we received the enforcement request regarding this '6.2 million dollars' user, our compliance department contacted the user immediately. After contacting, we found that there were indeed many issues. We received inquiries from two countries regarding other addresses, indicating that these funds were indeed linked to certain addresses, which caused the public panic over the past two days.
We can also understand the many voices trying to attack us from a compliance and risk control perspective on Twitter. As a new asset trading platform, especially one involving US stocks, which are highly regulated assets, this is a hurdle we must go through.
In the past 24 hours of public sentiment brewing, we have completed over 400 user withdrawals. We take every user's asset security very seriously and have never misappropriated any user's funds, including that of the user under the enforcement request, with whom we have communicated repeatedly. Moreover, just two hours before this Space was held, our platform was continuously subjected to cyber attacks, approximately 23 million times, but it has now fully recovered.
MyStonks takes community public sentiment very seriously and will actively respond to the issues that everyone is concerned about. Regarding the single investigation by regulators against this user, we will also actively communicate with him to solve the problem together. Personally, I have been conducting mining business in the US for seven years, everyone knows me, and we are not an anonymous team.
Community Questions
If this 6.2 million dollars is determined to be dirty money, how will the platform handle it?
Bruce J: First of all, we currently cannot 100% confirm that this money is dirty money, and even the regulatory agencies have not said it is dirty money; they only sent targeted inquiries regarding a specific investigation. The regulatory letter mentioned investigations into anti-money laundering, cross-border fund flow investigations, and suspicious trading activities. We need users to actively cooperate with these investigations, including their KYC information, fund flow information, address information, etc.
Currently, this real customer (not the user who posted on Twitter) has provided us with very limited information, so we are actively seeking more information from them. If we cannot obtain this information, our addresses and accounts will be temporarily frozen by regulators. If users cooperate with the investigation and we submit this information to the regulatory agencies, this matter can be resolved quickly; if the requirements of the regulatory agencies are not met, we cannot determine when this money will be unfrozen.
Currently, OKX has issued a warning that MyStonks is a phishing site. What is the reason for this? How long will it take to resolve this issue?
Bruce J: We have been communicating with OKX about this issue; (they) mainly responded due to the public sentiment on the internet, and at the same time, a large number of attacks and reports against our platform occurred over the past few days. We must admit that we are a bit caught off guard at the moment. The exposure of our account on Twitter resulted in a traffic spike to over 100,000 in a short time, and then OKX reported receiving a large number of complaints and reports against MyStonks, which is why OKX took action. The speed of this incident's development has been particularly rapid, but we believe the issue should be resolved soon.
Due to the impact of this '6.2 million dollars', will the wallet addresses holding user funds also be regulated? Are users' current withdrawals subsidized by the platform?
Bruce J: The platform has not subsidized user withdrawals. We have not pooled user funds; the freeze will only affect this specific amount, and not all user amounts will be impacted. We are currently processing user withdrawals without encountering any issues. Since MyStonks was established, we have about 20,000 users, processing approximately 500 to 800 deposits and withdrawals daily, with 99% having no problems.
I can only reiterate that this '6.2 million dollars' is just a targeted investigation against a single user, and the content of the targeted investigation includes suspicious transaction reports related to trading account data, and it comes from legal documents from two national governments. We also hope to resolve this matter as soon as possible.
MyStonks recently launched a US stock contract feature, but the leverage itself is not high. Is this related to regulation and compliance?
Bruce J: The leverage ratio is currently not directly related to compliance; it is just that our internal order book is still in development. Once fully completed, the leverage multiples will be adjusted accordingly, with different coins having different leverage ratios.
MyStonks's spot trading adopts an order flow model. When users buy and sell on the platform, we synchronize the transactions through our US stock accounts, with a latency in milliseconds. We will completely adopt an on-chain order book model for contract functions in the future.
On August 13, users waited over 40 minutes for their deposits to arrive. What was the reason for this? Is it related to regulation?
Bruce J: This is not due to regulation; it is mainly because we have received a large number of DDoS attacks, so our entire team is currently on standby 24/7.
Daily user deposits are conducted on a peer-to-peer basis; once confirmed on-chain, the platform will display the funds as received. Coincidentally, due to this issue, I can reveal that MyStonks will cancel the deposit and withdrawal functions moving forward. We are deploying new contracts, and our contract audit is being conducted by the largest auditing company in the blockchain industry. The first audit report has already been released, so we plan to launch a brand new DEX product this month, where users will no longer need to perform deposit and withdrawal operations, but can directly interact using their wallets.
As a DEX product, it will also reduce more regulatory troubles and pressures.
Bruce J: Finally, I want to add that MyStonks has not been smooth sailing since its establishment. In just half a year, we have accumulated over 20,000 users, with daily trading volumes approaching 100 million dollars. In this process, we will accept market supervision and public scrutiny. As the platform provider, we will uphold our bottom line, comply with regulations, and cooperate with requests from law enforcement agencies.
The claim that our platform has occupied user funds is completely a rumor and malicious attack. After this statement emerged, we still processed a large number of user withdrawal requests without any difficulties.
We will absolutely not run away. Through this incident, we have become more aware of the importance of compliance and public relations. Therefore, if any users are still interested in MyStonks, whether in compliance or public relations, we are open and hope that more excellent partners will join us.