BitMart Founder Rumors Fade as Binance bTokens Lead in Asia

BitMart’s founder Sheldon Xia is facing fresh public pressure as the exchange’s official Chinese-language X account demanded he explain the status of user funds and lay out a verifiable repayment plan. The dispute escalates amid claims of halted withdrawals and concerns that employees have not received final pay or compensation.

Separately, the tokenized-stock market continues to reshuffle as Binance bStocks overtook xStocks to become the second-largest tokenized stock issuer by value less than two months after launch. Across the industry, banks and regulators are also pushing into crypto rails—ranging from new stablecoin distribution in Hong Kong to mandatory crypto tax reporting in Singapore—while other stories highlight custody moves, tokenization pilots, and ongoing legal fights.

Key takeaways

• BitMart’s account demanded founder Sheldon Xia provide a verifiable asset disclosure and repayment plan, warning it will continue presenting evidence to regulators, law enforcement, lawyers, and media.
• Xia rejected the allegations as “fabricated rumors” and said he will pursue police reporting and technical/data forensics after collecting evidence of the posts.
• Binance bStocks surpassed xStocks to become the second-largest tokenized stock issuer, reaching about $624M versus xStocks’ roughly $579M on Aug. 3, based on Token Terminal data.
• Singapore finalized rules requiring crypto firms to report user transactions to the tax department, with timing that starts for new users in 2027 and continues for existing users later in 2027.
• Israel’s Bank Leumi plans to offer trading in Bitcoin, Ether, and Solana via Galaxy Digital’s platform from early 2027.

BitMart demands answers on user funds as Xia pushes back

BitMart’s official Chinese-language X account said some users are unable to withdraw funds and claimed that some employees have not received their final salaries or compensation. It directed Sheldon Xia to explain where user funds are and to produce a repayment plan by a stated deadline.

The account also warned that if Xia does not provide a verifiable disclosure and repayment plan, it will continue submitting supporting evidence to regulators, law enforcement, lawyers, and the media. The thrust of the message is that the exchange wants actionable accountability rather than general statements—particularly where withdrawals are reportedly affected.

Xia responded by calling the accusations “fabricated rumors.” In his reply, he said BitMart had “collected full evidence” of the content posted on X and vowed to file a police report during U.S. daytime hours and send a lawyer’s letter, seeking technical and data forensics.

What to watch in the BitMart dispute

This back-and-forth is more than a public argument; it centers on practical investor questions: whether funds are identifiable, whether withdrawals are genuinely blocked, and what repayment mechanism could be verifiable to affected users. Until there is independent disclosure or a documented plan that can be checked against on-chain activity, custodian reports, or other evidence, both sides’ claims will likely remain difficult for outsiders to validate.

Readers should watch for two key developments: (1) whether regulators or law enforcement filings are made public, and (2) whether any asset disclosure includes details that can be corroborated by third parties.

Tokenized stock market: Binance bStocks climb past xStocks

In a separate thread shaping market infrastructure, Token Terminal data shows Binance bStocks overtaking xStocks to become the second-largest tokenized stock issuer by value. According to the figures cited, bStocks reached about $624 million as of Aug. 3, moving ahead of xStocks at roughly $579 million.

Ondo Finance remained larger in the same snapshot, with total value tracked at about $927 million, according to Token Terminal. Still, the relative ranking change is notable because it happened quickly—less than two months after bStocks began operating.

Rapid growth—and the shifting ranks—behind tokenized equities

The tokenized stock sector appears to be moving faster than many early entrants expected. The same Token Terminal data referenced in the report indicates that a year earlier xStocks led with about $40.7 million, Robinhood-related issuance tracked around $37.2 million, and Ondo was far smaller at roughly $65,000. In contrast, the overall value tracked by Token Terminal has risen sharply from around $80 million to about $2.7 billion.

For investors and traders, these numbers matter because issuer size often correlates with liquidity expectations, listing stability, and integration into trading venues. However, market participants should also treat tracked “value” as a metric that depends on how specific tokens are issued, redeemed, and accounted for on-chain—so it’s worth monitoring methodology as tokenized asset ecosystems evolve.

Banks, stablecoins, and regulation push forward

Israel: Bank Leumi, described as Israel’s largest bank, announced a partnership with Galaxy Digital to let customers trade Bitcoin, Ether, and Solana via the bank’s investment platform beginning in early 2027. The plan is to make these assets available through a dedicated section of the Leumi Trade app, including buy, hold, and sell functions, including through Pepper, Leumi’s mobile banking arm.

Singapore: Singapore finalized regulations that require crypto firms to report user transactions to the tax department. The rules implement the OECD’s Crypto-Asset Reporting Framework into domestic law. The schedule takes effect from Jan. 1, 2027 for new users, while existing users are given time until Dec. 31, 2027.

Hong Kong: In Hong Kong, HashKey Exchange began beta distribution of HKDAP, described as a Hong Kong dollar-backed stablecoin regulated in the territory. HashKey Exchange is positioned as an authorized distributor, with initial retail access limited and early focus placed on institutions as the local stablecoin market continues to develop. The report also noted that the Securities and Futures Commission reportedly identified 65 fraudulent websites impersonating HashKey.

Ongoing industry friction: legal battles and tokenization experiments

There’s also continued legal and operational uncertainty in parts of the market. Binance and RedotPay are disputing whether a Singapore case connected to their nearly $473 million Hong Kong legal battle is nearing an end. RedotPay told Cointelegraph it expects Binance to discontinue the Singapore proceedings and will seek legal costs; Binance, in turn, said it is not abandoning its claims and has informed the court and RedotPay accordingly. The underlying Hong Kong allegations center on whether RedotPay diverted more than 470,000 Binance Card users by using Binance Pay funds for stablecoin top-ups outside a commercial agreement.

Meanwhile, tokenization experimentation continues. In Korea, Shinhan Asset Management signed a memorandum of understanding with Plume to develop a proof of concept for a Korean won-denominated tokenized fund. The stated aim is to test overseas use of won-denominated financial products onchain, an ecosystem that has so far been dominated by dollar-denominated assets.

Across these developments, the next signal to watch is whether regulators and institutions can translate new rules and bank/stablecoin rollouts into clear, verifiable user outcomes—especially where withdrawals, custody, and reporting obligations are at stake. For now, BitMart’s dispute and the rapid ranking changes in tokenized equities both suggest the industry is entering a phase where accountability and execution will increasingly matter as much as product launches.