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When a company’s own official social media account turns against its founder and threatens to hand evidence to regulators, something has gone seriously wrong. That is precisely where BitMart now finds itself, as the shuttered crypto exchange unravels in public view and users wait to find out whether they will ever recover their funds.
BitMart’s official Chinese-language account on X posted a public ultimatum on Monday demanding that founder Sheldon Xia disclose the exchange’s wallets, assets, liabilities, and available reserves, and produce a concrete repayment plan by Wednesday. The post stated that some users remained unable to withdraw funds and that certain employees had not received final salaries or compensation. If Xia failed to meet the deadline with verifiable disclosures, the account warned it would continue submitting evidence to regulators, law enforcement, lawyers, and the media.
A Shutdown That Has Raised More Questions Than Answers
The context matters here. BitMart announced on July 26 that it would wind down its exchange after its native BMX token collapsed and users began reporting withdrawal delays. The company said trading would end on August 26 and that full operations would cease on January 31. New deposits and registrations were halted immediately, and BitMart warned that some withdrawals could face additional compliance and security reviews, a caveat that has done little to reassure users already struggling to access their funds.
Since that announcement, on-chain data tracked by Arkham tells a stark story. Wallets attributed to BitMart held roughly 102 million US dollars in crypto assets on July 6. By July 26, the day of the shutdown announcement, that figure had dropped to around 71 million dollars. As of Monday, it stood at approximately 36.5 million dollars. That is a decline of about 65 million dollars in roughly six weeks. Arkham’s tracked wallets may not capture every address controlled by BitMart, and it is genuinely unclear how much of that decline reflects legitimate customer withdrawals, internal asset consolidation, or transfers to other wallets not yet identified. But the trajectory is difficult to look at without concern.
Xia Fires Back, but the Questions Remain
Sheldon Xia responded to the Monday post on X, calling the claims “fabricated rumors” and stating that evidence had been preserved. “We have collected full evidence of the content on X, all of which is fabricated rumors. During daytime US time, we will file a police report and send a lawyer’s letter to X, demanding technical and data forensics,” Xia said, according to a machine translation of his post. He also pushed back on suggestions that employees were being prioritised over customers in the handling of remaining assets, saying “everyone is a client” and that no special treatment was being applied.
This is not the first time Xia has been on the defensive. On August 8, he urged users not to trust unverified claims or screenshots purportedly shared by current or former employees. He has also previously denied that BitMart misappropriated user assets.
The Monday post raises an uncomfortable question that Xia has not yet resolved: who actually authored it? It was unclear whether the Chinese-language account remained under company control or had been accessed by a disgruntled employee or former staff member. Cointelegraph contacted BitMart for comment but received no immediate response. The ambiguity itself is telling. A functioning, well-governed exchange would not ordinarily face uncertainty over who controls its own official communications channel.
Why This Pattern Should Alarm Anyone Holding Funds on Smaller Exchanges
The BitMart situation fits a pattern that crypto users in Malaysia and Singapore have seen before, even if the exchange itself is not headquartered in the region. A token collapses, withdrawal delays emerge, the founder offers reassurances, on-chain balances decline faster than withdrawals alone would explain, and users are left waiting for answers that may never fully come.
Neither Malaysia’s Securities Commission nor Bank Negara Malaysia, nor Singapore’s Monetary Authority of Singapore, have issued specific statements on BitMart’s wind-down. BitMart was not a licensed exchange under any of those frameworks, which means users in the region who held funds there had limited formal recourse to begin with. That is the core regulatory lesson embedded in every exchange collapse: assets held on unlicensed or offshore platforms sit outside the protections that domestic frameworks are designed to provide.
The 36.5 million dollars still showing in Arkham’s tracked wallets is not nothing, but it is a fraction of what was visible six weeks ago, and the gap between what remains and what users are owed has not been publicly quantified. A verifiable proof-of-reserves disclosure, the exact thing the Monday post demanded, would at least establish a baseline. Without it, every reassurance from Xia is simply an assertion without evidence.
Whether this is a case of deliberate misappropriation, chaotic mismanagement, or something in between is not yet established. What is established is that users cannot withdraw, balances have fallen sharply, the company’s own communications infrastructure appears to be in dispute, and the founder’s response has been to threaten legal action against the platform hosting the accusations rather than to publish the financial transparency that would make those accusations irrelevant. That sequence of events is not a good sign, and for anyone still waiting on funds from BitMart, the Wednesday deadline will be a critical moment to watch.
