Money on hold: What went wrong with BitMart’s shutdown?

​Crypto exchange BitMart has announced a phased shutdown after nine years in the market, but the process has quickly been overshadowed by a wave of complaints about delayed withdrawals. As customer frustration grows, market participants are raising questions about the platform’s liquidity, reserves and legal structure.

On July 26, 2026, the company announced that it would gradually wind down its trading platform. According to BitMart, the decision followed “a careful evaluation of operational conditions, the market environment and the exchange’s future strategic direction.”

Management assured customers that they would still be able to withdraw their assets. However, shortly after the announcement, users began reporting on social media that their withdrawal requests had remained pending for days or even weeks.

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The situation gradually moved beyond ordinary customer complaints. Crypto projects and market makers also reported problems, while OpenGradient co-founder Matthew Wang publicly questioned the exchange’s solvency.

BitMart founder Sheldon Xia responded to the allegations only on August 8, saying the company had not misappropriated user funds.

Early signs of trouble

BitMart presented the process as an orderly wind-down. Under its published plan, the platform began disabling registrations, deposits and the opening of new trading positions at the end of July.

All spot, futures and other trading services are scheduled to end on August 26, while the trading platform is expected to shut down completely on January 31, 2027.

The company did not provide detailed reasons for leaving the market. Its initial statement attributed the decision to a strategic review, changes in market conditions and the company’s future business plans.

The announcement triggered a sharp market reaction. The BMX token fell by more than 50%, while users began actively withdrawing funds from the platform.

BMX token price performance. Data: CoinMarketCap.

Initial data, however, showed unusually slow withdrawal activity. Lookonchain analysts reported that during the first 24 hours after the announcement, only a few dozen wallets withdrew assets worth a combined $805,000.

Activity later increased significantly. On August 8, analyst Maartunn recorded around 7,200 Ethereum transactions related to withdrawals within 24 hours, or roughly 300 per hour.

The platform therefore continues to process transactions, but at the same time, a growing number of customers are reporting prolonged delays.

Some of these cases emerged even before the shutdown announcement. One Trustpilot user claims that a request to withdraw 131,103 USDT has remained unprocessed since July 22. Another customer reported having $280,000 stuck on the platform.

Hungarian company Gen6 said it has been unable to withdraw around $80,000 since July 26 and has filed a police report in the country. Scandic Coin, meanwhile, reported three pending requests, including withdrawals of 21,898 USDT and 926,635 SNC.

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From withdrawal delays to liquidity concerns

The situation drew even more attention after a statement from OpenGradient co-founder Matthew Wang. According to him, the project’s market maker has also been unable to withdraw its assets from BitMart.

Wang openly suggested that the exchange could be facing solvency problems. He also raised questions about BitMart’s Locked Savings program, which the platform promoted shortly before announcing its shutdown.

According to experts citing messages from the platform’s operations team, users were offered the opportunity to lock tokens for six months at an annual yield of around 15%. Wang noted that the campaign ran roughly a week before BitMart began winding down its services and suggested that the exchange may have been attempting to attract additional liquidity.

Meanwhile, allegations against the platform’s management began circulating on social media. After nearly two weeks of silence, BitMart founder Sheldon Xia addressed the situation on August 8.

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He said the company “has not disappeared and will not disappear” and rejected allegations that management had misappropriated customer funds or withdrawn its own assets ahead of users. According to Xia, the team is conducting an inventory and consolidation of assets while continuing to maintain its systems.

Reserves remain the key question

Xia also said BitMart is considering involving courts and independent auditors to prepare a transparent report. However, he did not provide specific figures on the company’s assets or liabilities.

BitMart had already faced complaints about withdrawal problems in May 2026. At the time, the company attributed them to its risk management system and efforts to prevent abuse.

Around the same period, the exchange announced plans to prepare a Proof of Reserves (PoR) report to demonstrate that it held sufficient assets to cover customer obligations. BitMart did not provide a publication date, however, and the report had still not appeared by August.

Against the backdrop of the current withdrawal delays, the absence of this information has become particularly significant. Xia’s statement about inventorying and consolidating assets indicates that the platform is reviewing its balance sheet, but it does not reveal the relationship between available assets and customer liabilities.

Even the publication of a PoR report would not provide a complete answer regarding BitMart’s solvency. Proof of Reserves can verify the existence of certain assets, but assessing a company’s financial position also requires information about its liabilities and any transactions that may take place off-chain.

This is why some market participants are demanding more detailed disclosures from the platform.

Scandic Coin, for example, has called on the company to provide verifiable evidence that it has sufficient liquidity to meet its obligations to customers.

What’s wrong with the jurisdiction?

Another issue concerns the exchange’s legal structure. BitMart has served users across multiple countries for years, but determining which company is ultimately responsible for its obligations to customers is not straightforward.

Under BitMart’s current user agreement, customers contract with GBM Global Inc., a company registered in the Marshall Islands. At the same time, the agreement itself is governed by the laws of the Cayman Islands.

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Distressed-assets investor Thomas Braziel, who specializes in creditor claims, highlighted this arrangement. He suggested that such a corporate structure could significantly complicate efforts to recover funds if customer claims escalate.

Braziel later said his team had continued examining legal entities associated with BitMart and speaking with holders of claims against the exchange. He noted that they had identified several unusual aspects of the case that required further investigation.

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As a result, this aspect of the shutdown could prove no less important than the technical processing of withdrawals. If the dispute moves to the courts, users will need to understand not only the size of their claims but also which legal entity they should pursue.

A test of transparency

For now, the situation surrounding BitMart cannot be reduced to a single straightforward scenario. The exchange continues to process some withdrawals and has not said that it lacks sufficient assets, while its founder rejects allegations that customer funds were misappropriated.

At the same time, numerous customers report prolonged delays and a lack of communication from the platform. The previously promised reserves report has not been published, while Xia, after nearly two weeks of silence, has so far limited his response to announcing an asset inventory and the possible involvement of independent auditors.

It is this combination of factors that has turned BitMart’s shutdown into a test of how transparent the exit of a centralized cryptocurrency exchange from the market can actually be.

Whether the process ultimately proves orderly will depend not on management statements, but on the platform’s ability to process all withdrawal requests and provide customers with clear information about its assets and liabilities.