Bitmart Founder Denies Rumors of Misuse of Funds and Promises Orderly Shutdown of Company Operations
Bitmart founder Sheldon Xia denied rumors of misusing customer funds and promised an orderly wind-down of the crypto exchange. In a Chinese-language post on August 8, he stated operations were "not out of control" and urged users not to trust online rumors. However, he provided no specific details, dates, or proof-of-reserves report.
The exchange announced a "gradual wind-down" starting July 26, citing business conditions and strategy. This caused its BMX token to plummet nearly 60%. New accounts, deposits, and orders were halted, with all trading to stop by August 26 and full closure by January 31.
Prior to the official announcement, users flooded social media with complaints about being unable to access their tokens, with one claiming $80,000 was locked. The company also saw internal drama, with CEO Nenter "Nathan" Chou being fired on July 24, a decision he claims he was not part of.
Bitmart's holding company is registered in the Cayman Islands, but the local monetary authority stated on August 6 that Bitmart is not licensed or regulated there for virtual asset business. The exchange suffered a $150 million hot wallet hack in December 2021. In May, it blamed its risk management system for freezing 239 accounts allegedly abusing trading subsidies, and has yet to provide a full promised reserve audit report.
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