BitMart Insolvency Alleged as 21,898 USDT Stays Frozen

BitMart is facing fresh questions about its balance sheet after OpenGradient co-founder and CEO Matthew Wang alleged that the exchange is insolvent, saying his project's market-making team has been unable to withdraw funds held on the platform. The exact amount and composition of the trapped assets have not been disclosed, and BitMart has not been independently established as insolvent, making the claim an allegation rather than a confirmed financial assessment.

The accusation comes as BitMart carries out a phased wind-down of its global trading platform. On July 26, the exchange halted new registrations, deposits and spot orders and moved futures accounts into reduce-only mode. It has said trading services will cease on August 26, with the broader platform wind-down expected to continue into January 2027. Withdrawals officially remain open, but users and projects have reported delays as the exchange performs extra compliance checks.

Wang also said BitMart encouraged token holders to lock assets roughly one week before related services were halted, a timing he argued was inconsistent with an orderly shutdown. That account has not been independently substantiated, and BitMart has not publicly shown that locked user assets were used to fund withdrawals or other obligations. Separately, Scandic Coin said approximately 21,898 USDT and 926,635 SNC submitted for withdrawal on July 26 remained unprocessed, and asked for verifiable evidence that BitMart has sufficient liquidity to meet obligations.

BitMart founder Sheldon Xia responded on August 8 by denying that customer assets had been misappropriated. He said the exchange had not fled and would not do so, and that its core team was conducting an asset inventory, consolidating assets and maintaining systems. Xia also said BitMart was considering involving courts and third-party auditors, and that a transparent report was expected.

What is still missing is independently verifiable financial data. BitMart said in May that it was preparing a proof-of-reserves report after earlier withdrawal complaints, but no comprehensive reserve disclosure has been published as of the latest reports. Even a proof of reserves would not settle the question of solvency on its own; a full assessment would also require information about liabilities to customers, lenders and other counterparties.

Withdrawal delays can stem from compliance reviews, operational issues or heavy volume rather than insolvency. But with trading being wound down and multiple parties unable to access funds, BitMart faces mounting pressure to show that customer assets are actually there. Wang's insolvency claim remains unproven, and without independently verified reserves and liabilities, the market has no definitive way to determine which explanation is correct.