BitMart Faces Insolvency Claims Amidst Frozen Withdrawals

Claims of Insolvency Arise at BitMart

BitMart, a centralized cryptocurrency exchange, is facing allegations of insolvency after reports surfaced regarding frozen withdrawals for a market-making team. Matthew, a co-founder of decentralized AI network OpenGradient, stated that funds belonging to his team are currently locked on the platform, and he questioned BitMart’s overall solvency.

Withdrawal Issues and Allegations

Matthew revealed that his market-making team cannot access their funds held on BitMart, expressing dismay that the exchange had encouraged users to lock their tokens just a week prior to restricting withdrawal services. He described the situation as a ploy to increase liquidity for the exchange before halting related capabilities.

“Our MM has our balances stuck on @BitMartExchange that we can’t get out ’cause they’re insolvent. Also insane that they were asking token holders to lock tokens on their exchange literally one week before they shut down,” he tweeted.

While these claims have not been independently verified, they contribute to the ongoing concerns regarding BitMart’s capacity to manage withdrawals during its current wind-down phase.

Operational Shutdown and User Concerns

BitMart began a systematic shutdown of its exchange operations on July 26, 2026, ceasing new account registrations and deposits, while futures accounts shifted to a reduce-only mode. All trading services are scheduled to terminate by August 26, 2026, with BitMart planning to conclude operations by January 31, 2027. Despite this, BitMart insists that withdrawals remain available, although users must go through various security checks before processing.

Matthew’s claims echo concerns from the project Scandic Coin, which also reported difficulties with accessing their funds on BitMart. They noted that about 21,898 USDT and additional tokens remained unprocessed since July 26, urging the exchange to confirm its liquidity status.

Company’s Response and Future Actions

In response to the growing distrust, BitMart founder Sheldon Xia on August 8 sought to alleviate worries by asserting that the exchange had not absconded with user funds. He indicated that the team is currently compiling a full inventory of assets and reaffirmed that formal updates would be forthcoming. However, the absence of a comprehensive proof-of-reserves report has left many questions unanswered.

Restriction for US Users

Since May 2022, BitMart has prohibited the registration of new US users. Existing users were advised to close positions and withdraw their assets by August 8, 2026, with a warning that accounts may face additional restrictions following this deadline.

As the situation evolves, users are left wondering about the exchange’s financial health and its ability to rectify their withdrawal issues, with the insolvency allegations remaining unproven but indicative of a deeper crisis at BitMart.