BitMart Founder Rejects Audit Demand After Complaints About Frozen Funds
BitMart says the account was hacked, but users are still reporting blocked withdrawals. The issue is adding pressure on the Cayman Islands exchange, which was already hit by a major hack earlier.
Key Takeaways
- BitMart founder Sheldon Lee rejected a call for an independent audit after complaints about frozen funds and unclear reserves.
- Users say withdrawals are still stuck, while employees are reportedly waiting for their July salaries.
- BitMart had previously announced it would wind down operations and already suffered major reputational damage from a hack of about $150 million in 2021.
BitMart founder Sheldon Lee has brushed aside a call to open the books, while users say they still cannot access their funds and employees are reportedly waiting for their July salaries. The debate around the crypto exchange is therefore not just about a planned wind-down of operations, but also about whether customer funds and liabilities are still fully transparent.
Withdrawal Allegations
On BitMart’s Chinese X account, a post appeared calling on Lee and business partner Yi Li to have wallets, assets, liabilities, and available reserves independently verified. According to Lee, that account was hacked and the accusations were fabricated. He said BitMart has gathered evidence and wants to file a report in the U.S., along with a legal letter to X for technical and digital forensics review.
The timing makes the situation especially sensitive. BitMart said last month that it is winding down operations and that August 26 would be the last trading day, but multiple users say withdrawals are still blocked. One user who goes by BeardStaff said his funds have been unreachable since July 26 and that a VIP manager removed him from Telegram at the moment the withdrawals got stuck.
Pressure on BitMart Is Rising
The call for an independent third party to review the balance sheet fits into a broader trust crisis around the exchange. BitMart, founded in 2017 and based in the Cayman Islands, operates in more than 180 countries and has already faced major reputational damage after a large hack in 2021, when about $150 million (€129 million) was stolen from hot wallets, according to earlier reports.
That history makes the current complaints especially serious for users and creditors. Onchain investigator ZachXBT also joined the discussion and said that a party with enough liquidity should simply return the funds instead of posting vague explanations. Distressed investment firm Echo Base also says it made BitMart a funded restructuring proposal, including debtor-in-possession financing and equity at emergence, but according to CEO Roshan Dharia, the exchange has not responded yet.
Why This Matters
For European crypto readers, this case shows how quickly an announced wind-down can turn into a debate about custody, transparency, and payouts. Especially at a large exchange with customers in many countries, uncertainty around reserves and liabilities can lead to extra pressure from users, counterparties, and possibly regulators too. It is also a reminder that earlier incidents, such as hacks or delayed compensation, can keep affecting trust in a platform for a long time.
BitMart’s problems fit into a broader wave of exchange wind-downs and customer claims in the sector. At BitMEX, users also previously dealt with a rapid wind-down that put immediate pressure on withdrawals.
