Crypto Exchange OX.FUN Bursts FUD of Insolvency And $1 Million USDC Frozen

Crypto exchange OX.FUN has come forward to address rumors of insolvency and nearly $1 million USDC frozen with the exchange. Following the early talks about the mass exodus of funds, the exchange came forward stating that all withdrawals are processing normally while calling the talks “co-ordinated FUD”.

OX.FUN Bursts Myth of Exchange Hack

Earlier today, social media platform X was abuzz with discussions around the crypto exchange OX.FUN slipping into insolvency while facing a mass exodus of funds. Earlier reports also suggested that $1 million in USDC has been frozen.

Several employees of the crypto exchange reported that the platform turned insolvent after massive withdrawal of funds by users. Furthermore, reports emerged that the company’s remaining liquidity dropped to just $180,000. The announcement comes at a time when crypto exchange Bybit faced a severe hack losing Ethereum from the platform.

In an attempt to manage the crisis, the team was said to be “triaging” the remaining funds. However, OX.FUN issued a statement claiming that no users, aside from JefeDAO, were impacted by the recent financial crisis. The platform further alleged that JefeDAO engaged in an attempt to exploit the system. In an official statement, the crypto exchange stated:

“All withdrawals are processing normally. This is coordinated FUD. No users were affected by the actions of JefeDAO aside from JefeDAO. He attempted to exploit the platform, got all of his funds frozen, and now is attempting a social media campaign”.

Crypto Exchange Pins Blame on JefeDAO

Crypto exchange OX.FUN has issued a detailed statement accusing JefeDAO of executing an oracle manipulation attack. According to the exchange, JefeDAO made a $1 million USDC deposit on February 14, 2025. Shortly after, between 05:46:56 and 05:57:06 UTC, he allegedly began selling the token JAILSTOOL aggressively.

Furthermore, the exchange asserted that Jeffe placed large limit orders below the fair price—$600,000 worth at $0.048 and additional orders at $0.045 when the token’s fair price was $0.05. As a result, Jeffe traded $300,000 worth of the asset. OX.FUN claims this activity pushed the market price below $0.04, enabling JefeDAO to close its short positions at a low of $0.034.

“This behavior is explicitly against our Terms of Service and goes against the interest of other users on OXFUN,” the statement read.

As the crypto market participation continues to grow, the number of crypto exchange hacks has grown. Last year in 2024, WazirX reported the largest hack losing more than $235 million in user funds.