BitMart founder Sheldon Xia has publicly rejected allegations that the exchange absconded with client funds, calling such rumors baseless and insisting the team is working on an orderly wind-down. In a statement posted on X on August 8, Xia said the core team is conducting asset reviews, consolidation, and system maintenance, and may involve a court and third-party auditor to provide transparent disclosure.
The statement comes as BitMart moves forward with its previously announced shutdown. On July 26, the platform said it would begin an “orderly wind-down” of its trading operations, citing operating conditions, market environment, and strategic direction. The exchange immediately halted new account creation, deposits, and fresh orders, and set an August 8 deadline for U.S. customers to withdraw their crypto. All spot and futures trading is scheduled to stop on August 26, with full operations ending by January 31. Following the announcement, BitMart’s native BMX token crashed nearly 60% in a single day, according to CoinGecko.
Xia’s post, written in Chinese and shared that same day, emphasized that BitMart “has not run away” and “will not run away.” He urged users not to believe screenshots, leaks, or rumors attributed to current and former staff, though he did not provide specific figures, timelines, or a proof-of-reserves report. The exchange had previously promised a full proof-of-reserves but has yet to deliver one.
The unfolding crisis was preceded by weeks of user complaints about inaccessible funds. Some account holders reported being unable to withdraw tokens, with one user claiming to have $80,000 trapped on the platform. Meanwhile, BitMart’s global CEO Nenter “Nathan” Chow was dismissed on July 24, just days before the shutdown was made public. Chow told reporters he was not involved in the wind-down decision and learned of it only after it was announced.
Adding to the uncertainty, the Cayman Islands Monetary Authority (CIMA) stated on August 6 that BitMart and its related entities are not, and have never been, registered, licensed, or regulated to operate a virtual-asset business in or from the territory. BitMart’s holding company is registered in the Cayman Islands, and its user agreement invokes Cayman law, leaving users with no clear regulatory recourse. The exchange also suffered a $150 million hot-wallet hack in December 2021, further eroding confidence.
Xia’s vow of transparency and a possible court-supervised audit offer a glimmer of hope, but the community remains skeptical. The outcome of BitMart’s asset review may set a precedent for how troubled centralized exchanges manage orderly shutdowns.
