Bitmart founder knocks back fund misappropriation rumors, commits to orderly wind-down

Bitmart founder Sheldon Xia has denied that the exchange had fled with customer funds. He told account holders on X that the team is still working through asset inventory, asset consolidation, and system maintenance, with formal announcements to follow.

In his post, which was written in Chinese and shared on August 8, Xia first stated that the exchange “has not run away” and “will not run away.”

He then went on to ask users not to trust the wave of rumors, screenshots, and claimed leaks attributed to current and former staff.

However, Xia did not go into specifics, gave no figures, set no dates, and pointed to no reserve report. His post is coming on the same day that Bitmart set as the deadline for US customers to pull their crypto, with many users looking forward to the proofs.

A shutdown that keeps getting messier

Bitmart said on July 26 that it would begin an “orderly wind-down of its trading platform operations,” a decision it tied to its operating conditions, market environment, and strategic direction.

The company’s BMX token dropped close to 60% in a day on the news, per CoinGecko data.

It ended new account creation, stopped receiving deposits, and switched off fresh orders on July 26. It also stated that all spot and futures trading will stop on August 26.

All operations on Bitmart will be ending by January 31. However, the platform stated that users will still be able to keep their login access for some time to review records and file withdrawal requests.

Bitmart rumors were spreading even before shutdown

Days before Bitmart officially announced it was shutting down, users had flooded social media with reports that they could not get to their tokens in time or at all, as Cryptopolitan reported at the time.

One account holder stated that they still had $80,000 in crypto trapped on the platform. “Right now 150,000 people are looking for their money,” that person said, pointing to a Bitmart Telegram channel

While users were experiencing difficulties with the platform, its leadership was also having a bit of drama as its global CEO, Nenter “Nathan” Chow, was let go.

Chow informed reporters that he learned about his employment’s ending on July 24. He said he played no part in the wind-down decision and only learned of it when it became public.

Chow joined Bitmart from Animoca Ventures and took the CEO role in April 2025, when Xia stepped back to group president. Weeks before the shutdown, Chow had publicly pledged the company would “be here for the next eight” years.

No regulator to fall back on

Bitmart’s holding company, GBM Global Holding Company Limited, is registered in the Cayman Islands, and its user agreement invokes Cayman law.

However, on August 6, the Cayman Islands Monetary Authority (CIMA) allegedly informed reporters that Bitmart and its related GBM entities “are not, and have never been, registered, licensed, regulated, or otherwise authorized” to run a virtual-asset business in or from the territory.

BitMart suffered a hot-wallet hack in December 2021, where it lost about $150 million.

In a statement that was released on May 23 to address earlier withdrawal complaints, it blamed its risk system, stating that it was intercepting 239 linked accounts it accused of abusing trading subsidies. A full proof-of-reserves report, as promised, is yet to be shared.

The smartest crypto minds already read our newsletter. Want in? Join them.