What to know:
- BitMart faces demands for reserve details and a clear user repayment plan by Aug. 19.
- Xia rejects the fund claims as BitMart prepares a police report and legal notice to X.
- Trading ends Aug. 26, before BitMart shuts down platform operations on Jan. 31, 2027.
BitMart faces allegations of asset mismanagement after people claiming to be employees posted demands through the exchange’s Chinese-language X account. The group sought answers about frozen customer funds, delayed withdrawals, and unpaid salaries by Aug. 19.
The group directed its demands at founder Sheldon Xia and partner Yi Li. It sought detailed financial disclosures and a workable repayment plan for affected users.
The identities of those controlling the account remain unverified, while the allegations lack independent confirmation. Xia rejected the claims as fabricated rumors.
Why BitMart Faces Fund Demands Before Aug. 19
First, the group demanded that management give information on where the funds of customers are stored. This included information regarding the assets and liabilities, wallet addresses, and reserves available for repayment.
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The posters believed that through such information, one would be able to know if BitMart had enough assets to cover the balances of its customers. They also wanted to know the reason why most users could not withdraw their funds.
The fourth demand by the alleged employees was to find out the date when the executives knew about the problem with the withdrawals and the persons who authorized the limitations.
In addition, there was a demand for investigations of all agreements that were involved with the assets of customers. In particular, the posters cited reports on affiliated accounts, associated firms, trusts, and other funding methods.
However, there were no records given in support of the reports. The posters believed that each agreement had to be investigated before the persons responsible for any failure in that agreement were identified.
Unpaid salaries constituted the third demand. Some of the employees had not been paid their salaries or severance payments according to the poster. The fifth demand required Xia and Li to come up with a solution for repaying customers by Aug. 19.
Xia Denies Claims as BitMart Wind-Down Continues
Xia denied the claims shortly after the demands surfaced. He explained that the company had gathered evidence for a police report.
Moreover, the founder revealed that BitMart would issue a legal notice to X. The demand would ask for technical and account verification in connection with the posts.
He emphasized the priority of assets owned by customers. Xia further explained that employees would not get preferential treatment in repayments over users.
On-chain investigator ZachXBT challenged the response. He said BitMart should return the funds instead of posting vague statements if it had sufficient liquidity.
Customers also requested ZachXBT to look into the situation, as they were facing issues with account access and withdrawals.
BitMart initiated the wind-down process of its services on July 26. It has stopped new user registration, deposits, and spot orders of cryptocurrencies and fiat currencies.
The future accounts have been put on reduced-only status as of that date. It permits customers to liquidate the current holdings without adding more.
All spot, futures, and other forms of trading will stop on Aug. 26. The operations of the platform will cease on Jan. 31, 2027.
Withdrawing is going to be possible till closure of the exchange. However, the withdrawal requests can be subject to identity, source-of-funds, sanctions, and security checks.
“Users have reported withdrawal delays during the wind-down, although the complaints remain unverified. The group’s Aug. 19 deadline falls one week before BitMart ends trading on Aug. 26.
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