Original/Odaily Planet Daily ( @OdailyChina )

By Golem ( @web3_golem )

On the morning of August 13th, MyStonks, a US-based token trading platform, announced that its 24-hour trading volume exceeded $97 million. According to Coingecko data, MyStonks's 24-hour trading volume has surpassed Uniswap V2 on Ethereum, placing it in the top 25 DEXes by 24-hour trading volume. This not only signals the rapid expansion of the US-based token trading market, but also marks MyStonks's gradual rise to a leading position in the US-based token trading platform space.

However, on the afternoon of August 13th, a user posted on the X platform that MyStonks had misappropriated $6.2 million in deposits, shut down withdrawal channels, and dispersed funds. This incident quickly garnered public attention, sparking concerns about the security of the MyStonks platform and even leading some users to panic and withdraw funds.

In response to this, MyStonks officials quickly responded , stating that this was because they had recently received an enforcement request from US regulators regarding a single user, involving multiple special investigations such as anti-money laundering, fraud gangs, drug trafficking, sanctions evasion and suspicious transaction reports (SARs), but it did not affect the recharge and withdrawal operations of other users on the platform; the platform's compliance department had contacted the user involved through a secure channel and guided him to complete the submission of relevant compliance information.

MyStonks officials also revealed that after users posted their "rights protection post," the website received over 23 million DDoS attacks, as well as numerous complaints and reports. To address user concerns and better understand the full extent of the incident, MyStonks held a "Space" event on the evening of August 13th. Founder Bruce J provided a detailed explanation of the incident, addressing community concerns, including security compliance and the issue of being identified as a phishing website by OKX. He also outlined the platform's future product plans. Odaily Planet has summarized the key takeaways from the Space event below for your reference.

Response to the "US$6.2 million" incident

Bruce J: The $6.2 million incident actually happened a week ago . I think this kind of thing is normal for any crypto exchange.

Since we established our team in 2024, we've consistently adhered to a compliant approach. Therefore, among all current US stock token platforms, our compliance procedures are arguably the most comprehensive, as evidenced by both our FinCEN (Financial Crimes Enforcement Agency, an agency of the US Treasury Department) Money Services Business (MSB) license and our SEC Security Token Offering (STO) filing. Currently, our compliance team boasts a headcount comparable to that of a traditional CEX, all based in the US.

In light of the recent blockage of $6.2 million in online withdrawals, we'd like to take this opportunity to discuss SEC compliance requirements. Since last month, some addresses originating from mixers have been depositing funds into the MyStonks platform. Last week, we received an enforcement request from a law enforcement agency. Due to a confidentiality order, we are unable to disclose the details of the request. However, the details are similar to those of other exchanges, including an investigation into whether users are engaging in illegal activities, terrorist organizations, human trafficking, money laundering, and fraud.

When we received the law enforcement request regarding the user with the "$6.2 million" account, our compliance department immediately contacted the user. We discovered numerous issues. We also received inquiries from two countries regarding other addresses, indicating that the funds were indeed linked to certain addresses, leading to the recent public panic.

We understand the many attempts on Twitter to attack us from a compliance and risk management perspective. As a new asset trading platform, especially one dealing with heavily regulated assets like US stocks, we have to navigate some difficult times.

In the past 24 hours, as public opinion fermented, we completed over 400 user withdrawals . We attach great importance to the asset security of every user and will never misappropriate any user's funds, including the user who was requested by law enforcement. We have repeatedly communicated with him. In addition, two hours before the Space event, our platform was repeatedly attacked by cyberattacks, with approximately 23 million hits, but we have now fully recovered.

MyStonks takes community opinion very seriously and will actively respond to issues of concern. Regarding the regulatory investigation into this user, we will actively communicate with him and work together to resolve the issue. Furthermore, I've been operating a mining business in the US for seven years, so everyone knows me. We're not an anonymous team.

Community Questions

If the $6.2 million is determined to be black money, how will the platform deal with it?

Bruce J: First of all, we haven't yet 100% confirmed that this money is black money, and neither have regulators. They've simply issued a targeted inquiry for a specific investigation. The regulatory letter mentions anti-money laundering investigations, cross-border fund flow investigations, and investigations into suspicious transactions. We require users to actively cooperate with these investigations, including their KYC information, fund flow information, address information, and more.

The actual customer (not the user who posted on Twitter) has provided us with very limited information, so we are actively seeking it. If we cannot obtain this information, our addresses and accounts will be temporarily frozen by regulators. If the customer cooperates with the investigation and we provide this information to the regulator, the matter will be resolved quickly. If the regulator's requirements are not met, we cannot be sure when the funds will be released.

OKX has issued a warning that MyStonks is a phishing website. What is the reason? How long will it take to resolve this issue?

Bruce J: We've already been in communication with OKX about this issue. They were primarily responding to online public opinion, and over the past two days, there's been a surge of attacks and reports against our platform. Admittedly, we were caught off guard. The Twitter post exposing our account saw traffic surge over 100,000 in a short period of time. OKX then reported receiving numerous complaints and reports against MyStonks, prompting us to address the situation. The entire situation unfolded incredibly quickly, but we believe the issue can be resolved quickly.

Affected by this "$6.2 million" incident, will the wallet addresses storing user funds also be regulated? Are users' current withdrawals subsidized by the platform itself?

Bruce J: The platform doesn't subsidize user withdrawals. We don't pool user funds. A freeze only freezes a specific amount, not all user funds. We've been processing user withdrawals without any issues. Since its inception, MyStonks has approximately 20,000 users and processes approximately 500 to 800 deposits and withdrawals daily, with 99% of them experiencing no issues.

I can only reiterate that this "$6.2 million" was merely a targeted investigation into a single user. The investigation included suspicious transaction reports regarding account data and legal documents from two governments. We hope to resolve this matter as soon as possible.

MyStonks recently launched a US stock contract function, but the leverage itself is not large. Is this related to regulation and compliance?

Bruce J: The leverage ratio currently has no direct relationship with compliance. It is just because our internal "order book" is still under development. Once it is fully completed, the leverage ratio will be adjusted accordingly, and different coins will have different leverage ratios.

MyStonks' spot trading utilizes an order flow model. When users buy or sell on the platform, we synchronize the transactions through our US stock accounts, with millisecond latency. We will fully utilize an on-chain order book model for contract functionality in the future.

On August 13, users had to wait for more than 40 minutes for their recharges to arrive in their accounts. What was the reason for this? Is it related to regulation?

Bruce J: This is not due to regulatory reasons, but mainly because we have been attacked by a large number of DDoS attacks, so our entire team is currently on standby 24 hours a day.

Daily user deposits are conducted peer-to-peer. Once confirmed on-chain, the platform will display the funds as credited. Taking advantage of this opportunity, I can reveal that MyStonks will be discontinuing the deposit and withdrawal functions. We are currently deploying new contracts, and we have hired one of the largest auditing firms in the blockchain industry to conduct the contract audit. The first audit report is already out, so we will likely launch a new DEX product this month. Users will no longer need to perform deposit and withdrawal operations; they can simply connect and interact directly with their wallets.

As a DEX product, it will also reduce more regulatory troubles and pressures.

Bruce J: Finally, I'd like to add that MyStonks hasn't been without its challenges since its founding. In just six months, we've amassed over 20,000 users and achieved daily trading volume approaching $100 million. Throughout this process, we will accept market scrutiny and public scrutiny. As a platform, we will uphold our core principles, ensure compliance, and cooperate with law enforcement agencies.

The claim that our platform has misappropriated user funds is completely a rumor and malicious attack. After such remarks appeared, we still handled a large number of user withdrawal requests without any difficulties .

We will definitely not run away. Through this incident, we have become more aware of the importance of compliance and public relations. So if there are users who are still interested in MyStonks, whether in terms of compliance or public relations, we are open to more outstanding partners to join us.