CoinDesk
BitMart users are still locked out of their funds almost a month after the exchange said it would cease operations, with founder Sheldon Lee blaming the warnings on a "hacked" Chinese-language X account rather than a live solvency crisis. Lee called the posts "fabricated rumors" and said he would pursue police reports and a lawyer's letter to X, but did not address the central demand: open the wallets, prove the reserves, or send the money back. Onchain investigator ZachXBT and a user reporting $10 million in locked assets are pushing for the same thing: return funds instead of issuing denials.
Why it matters
Echo Base, a distressed-investment firm, said it proposed a funded restructuring package including debtor-in-possession financing and equity at emergence, but BitMart never responded. Echo Base CEO Roshan Dharia framed the situation bluntly: "There is no version of this that ends well without going to court." A custodial book this size cannot be wound down consensually, Dharia said, because customer claims are dispersed and unreached claimants keep their claims in full.
BitMart is incorporated in the Cayman Islands, which means any court process would carry cross-border friction before retail claimants see a distribution. The Aug 19 deadline for transparency set by an unidentified X poster passed with no auditor named and no wallets disclosed.
Market impact
The BitMart wind-down is landing against a broader retreat from centralized venues. Combined CEX volumes fell 23.9% in July to $3.76 trillion, the lowest since November 2023. DEX spot market share climbed to a record 19.5% over the same window, and RWA perpetuals cleared $460 billion. Each high-profile custody failure accelerates the shift toward self-custody and on-chain settlement that the distressed venues are not built to keep up with.
Frequently asked questions
-
Why can't BitMart users withdraw their funds right now?
BitMart announced on July 26 that it would wind down operations with Aug 26 as its final trading day, but users report withdrawals remain blocked. Founder Sheldon Lee has not addressed the freeze directly, calling related warnings "fabricated rumors" and attributing them to a "hacked" Chinese-language X account.
-
Who is ZachXBT and what is he asking BitMart to do?
ZachXBT is an independent onchain investigator active on X. After BitMart's wind-down announcement, he pushed the exchange to either reopen withdrawals or publish verifiable proof of reserves rather than issue denials of the solvency concerns.
-
What is Echo Base proposing for BitMart?
Echo Base, a distressed-investment firm, said it offered BitMart a funded restructuring package including debtor-in-possession financing and equity at emergence, underwritten by Echo Base as a claimholder. BitMart has not responded.
-
Why does Cayman Islands incorporation matter for BitMart users?
BitMart is incorporated in the Cayman Islands, which means any court-supervised restructuring or liquidation would carry cross-border friction. Distributed retail claimants face the extra hurdle of enforcing recoveries across jurisdictions before seeing any distribution.
-
What was the Aug 19 deadline and what happens now?
An unidentified X poster set an Aug 19 deadline for BitMart to publish verifiable wallets, assets, liabilities, and reserves to independent review. With the deadline passed and no auditor named, the poster says evidence will be handed to law enforcement, regulators, and the media.
CryptoSlate
Crypto News
TheBlock
CoinTelegraph