BitMart Founder Asked to Explain Funds; Xia Denies Claims as Fabricated

BitMart’s official Chinese-language X account has issued a public ultimatum to the exchange’s founder, Sheldon Xia, demanding an explanation of customer funds and a repayment plan by Wednesday. The post alleges that some users still cannot withdraw funds and that certain employees have not received their final salaries or compensation, while urging Xia to disclose BitMart’s wallets, assets, liabilities, and available reserves.

The exchange, meanwhile, is already in wind-down mode. BitMart announced on July 26 that trading would end Aug. 26 and that operations would cease on Jan. 31, with new deposits and registrations stopped and withdrawals potentially subject to additional compliance and security reviews.

Key takeaways

• BitMart’s official “BitMart_zh” X account demanded founder Sheldon Xia publish a verifiable asset disclosure and repayment plan by Wednesday, threatening escalation to regulators and law enforcement.
• The post alleges continuing withdrawal failures for some users and unpaid final employee compensation, while calling for full transparency around BitMart’s wallets and reserves.
• Xia rejected the claims in a separate post, describing them as “fabricated rumors” and saying evidence has been preserved for a police report and legal action.
• On-chain reporting from Arkham attributed to BitMart wallets shows a sharp drop in tracked crypto holdings since late July, though the figures may not capture all assets and do not prove why balances declined.

A public deadline tied to fund transparency

In a Monday post, BitMart’s Chinese-language X account said some users remained unable to withdraw funds. It also stated that certain employees had not received final salary or compensation, and it demanded that Xia provide a repayment plan alongside a disclosure of BitMart’s wallets, holdings, liabilities, and available reserves.

According to a machine translation referenced in the reporting, the account warned that if Xia fails to deliver a verifiable disclosure and repayment plan by the deadline, it would continue submitting supporting evidence to regulators, law enforcement, lawyers, and the media.

It was not immediately clear who authored the post or whether the account still operates under company control. Cointelegraph said it reached out to BitMart for comment but did not receive an immediate response.

Founder’s rebuttal: “fabricated rumors” and legal escalation

Sheldon Xia responded on X on Monday, disputing the claims as “fabricated rumors.” In the response—again described via machine translation—Xia said his team had collected “full evidence” of what was posted on X and that it had been preserved for subsequent legal steps.

Xia said that during U.S. daytime hours he would file a police report and send a lawyer’s letter to X, requesting technical and data forensics. He also argued that employees were not being given priority over customers in how assets are handled, adding that “everyone is a client” and that there are no special privileges.

Earlier, Xia had denied that BitMart misappropriated user assets. In a separate message dated Aug. 8, he asked users not to rely on unverified claims or screenshots allegedly shared by current or former employees.

Wind-down timeline sets the context for withdrawal disputes

BitMart’s demand for transparency arrives amid a broader operational shift. As Cointelegraph previously reported, the exchange announced on July 26 that it would wind down its platform after its BMX token fell sharply and users reported withdrawal delays. BitMart said trading on the exchange would end on Aug. 26 and operations would stop on Jan. 31.

As part of the shutdown, the exchange stopped accepting new deposits and registrations. It also cautioned that some withdrawals could face additional compliance and security checks—an issue that often matters in wind-down scenarios, since custodial controls, account reconciliation, and eligibility review can affect withdrawal timelines.

The current dispute on X centers on whether those delays reflect normal wind-down procedures or an inability to access or account for funds. The account’s Wednesday deadline suggests it believes the missing transparency has become urgent enough to merit escalation.

On-chain snapshots: Arkham tracks a decline in BitMart-attributed wallets

Separate from the public back-and-forth, on-chain analytics provide a partial view of assets attributed to BitMart. According to Arkham’s wallet entity page referenced in the reporting, wallets tagged as BitMart held about $36.5 million in crypto assets as of Monday.

Arkham’s figures also show that this balance fell from roughly $71 million on July 26 and from around $102 million on July 6. While these numbers indicate a significant reduction over time, the tracked wallets may not represent all of BitMart’s controlled assets, and it remains unclear what caused the changes—whether customer withdrawals, internal consolidation, transfers to other wallets, or other movements.

For investors and users, this distinction is critical. In wind-down cases, decreases in tracked balances do not automatically translate to proof of full repayment or misappropriation. Instead, they raise questions about whether assets are moving to accessible withdrawal pipelines, to other custody locations, or into more opaque structures that may complicate verification.

What to watch next

The immediate focus is whether Xia will meet BitMart_zh’s Wednesday deadline with a verifiable asset disclosure and repayment plan—and whether the response can be independently substantiated. Beyond that, users should watch for clearer withdrawal communication tied to the exchange’s wind-down schedule, alongside any regulator or law enforcement activity stemming from the threatened escalation.