BitMart’s Deadline Expires Tomorrow: What Happens to…

BitMart founder Sheldon Xia is facing a 19 August deadline set by an open letter posted on the exchange's Chinese-language X account, which employees are reported to have taken over. The letter demands disclosure of BitMart's assets, an explanation for frozen user withdrawals, and a concrete repayment plan, after weeks of blocked withdrawals. Trading on BitMart is set to end on 26 August, with the platform closing entirely on 31 January 2027.

The open letter, directed at Xia and partner Yi Li, made five demands: identify where user funds are held, state who authorized withdrawal restrictions, reveal when management first learned withdrawals were blocked, publish BitMart's wallets, assets, liabilities and usable reserves, and provide a repayment plan with timelines, payout order and oversight. The authors warned that if Xia does not respond by 19 August, they will submit evidence to regulators, law enforcement, lawyers and media outlets worldwide. The message rejected the idea that this is a routine business closure, saying frozen funds represent life savings for ordinary users and unpaid salaries affect workers with no other recourse.

Xia responded on 17 August by calling the open letter "fabricated rumors," according to Cointelegraph. He said the Chinese-language X account had been compromised and announced plans to file a police report and send a legal notice to X for technical and data forensics. "We have collected full evidence of the content on X, all of which is fabricated rumors," Xia wrote. His response did not include a proof-of-reserves disclosure, a repayment timeline, or specific answers to the withdrawal complaints. On 8 August, Xia had insisted BitMart "did not run away" and "will not run away in the future," but provided no audited figures.

Separately, former global CEO Nathan Chow said he was terminated around 24 July and learned of the wind-down publicly, claiming no role in the decision. Blockchain analytics firm Arkham attributed roughly $36.5 million in wallets to BitMart as of 17 August, down from about $71 million on 26 July and $102 million on 6 July. The tracked wallets may not capture all BitMart-controlled assets, and it is unclear how much of the decline reflects customer withdrawals, asset consolidation or transfers. With no official reserve statement, the exchange's solvency remains an open question.

On-chain investigator ZachXBT argued that a genuinely liquid exchange would allow immediate withdrawals. Distressed investment firm Echo Base told CoinDesk it had proposed a funded restructuring package but received no response, warning the situation is unlikely to resolve without court proceedings.

BitMart's wind-down is the third among mid-tier exchanges this year: BitMEX announced its shutdown on 23 July with a final close date of 23 September, and Bit.com completed its wind-down by 31 March. The pattern points to pressure on exchanges caught between falling trading fee revenue and rising compliance costs, particularly under Europe's MiCA framework. As recently as 24 June, BitMart had announced an Australian financial services license, signaling growth plans. BitMart has operated for about nine years and previously compensated users after a December 2021 hot-wallet breach with estimated losses between $150 million and $196 million. The Cayman Islands-registered exchange serves a broad retail user base across Asia, and whether the 19 August deadline yields an audit, a legal filing or silence will shape the final chapter of its operations.