Bitmart founder Sheldon Xia has categorically denied rumors that the cryptocurrency exchange absconded with customer funds. In a post on X (https://x.com/sheldonbitmart/status/2086058929839337611) written in Chinese and shared on August 8, Xia told account holders that the team remains actively engaged in asset inventory, asset consolidation, and system maintenance, with formal announcements expected to follow.

Xia stated plainly that the exchange "has not run away" and "will not run away." He urged users not to trust a wave of rumors, screenshots, and claimed leaks attributed to current and former employees. However, Xia offered no specifics, figures, timelines, or reference to any reserve report. His statement coincided with the deadline Bitmart had set for US customers to withdraw their cryptocurrency holdings, a date many users had anticipated would be accompanied by proof-of-reserves documentation. Proof-of-reserves reports became an industry benchmark after the collapse of FTX in November 2022 exposed how major exchanges operated without transparent accounting of customer assets, making the absence of such a report particularly unsettling for Bitmart users.

A Shutdown That Keeps Getting Messier

On July 26, Bitmart announced it would begin an "orderly wind-down of its trading platform operations," citing operating conditions, market environment, and strategic direction (https://www.cryptopolitan.com/bitmart-announces-shutdown-bmx-crashes-by-60/). The company's BMX token plummeted nearly 60% within a single day following the announcement, according to CoinGecko data. Exchange tokens, which often tie their value to the trading platforms that issue them, are especially vulnerable during wind-downs since their utility depends on a functioning exchange.

Bitmart ceased new account registrations, halted incoming deposits, and disabled fresh orders on July 26. The exchange also confirmed that all spot and futures trading would be suspended on August 26, with all platform operations concluding by January 31. However, Bitmart stated that users would retain login access for a period to review records and submit withdrawal requests.

Rumors Circulated Before Official Shutdown

Days before Bitmart officially announced its closure, users had already flooded social media with complaints that they were unable to access or withdraw their tokens, as Cryptopolitan reported at the time (https://www.cryptopolitan.com/bmx-rebounds-bitmart-withdrawal-delay-rumor/). One account holder claimed to have $80,000 in cryptocurrency trapped on the platform. "Right now 150,000 people are looking for their money," the individual stated, referencing a Bitmart Telegram channel.

While users reported mounting difficulties, the exchange's leadership was also in turmoil. Global CEO Nenter "Nathan" Chow was dismissed. Chow told reporters he learned of his termination on July 24 and stated he had no involvement in the wind-down decision, only becoming aware of it when it was made public.

Chow joined Bitmart from Animoca Ventures and assumed the CEO role in April 2025, when Xia transitioned to group president. Just weeks before the shutdown announcement, Chow had publicly committed that the company would "be here for the next eight" years.

No Regulatory Safety Net

Bitmart's holding company, GBM Global Holding Company Limited, is registered in the Cayman Islands, and its user agreement is governed by Cayman law. On August 6, the Cayman Islands Monetary Authority (CIMA) reportedly informed journalists that Bitmart and its related GBM entities "are not, and have never been, registered, licensed, regulated, or otherwise authorized" to conduct a virtual-asset business in or from the territory (). The use of offshore jurisdictions for corporate registration has been a common practice among cryptocurrency exchanges, and CIMA's statement means affected users have no Cayman-regulated avenue for complaint or recourse through the territory's financial regulator.

Bitmart previously suffered a hot-wallet hack in December 2021, resulting in the loss of approximately $150 million. In a May 23 statement addressing earlier withdrawal complaints, the exchange blamed its risk system, stating it was intercepting 239 linked accounts it accused of abusing trading subsidies. A full proof-of-reserves report, as previously promised, has yet to be released.