BitMart Founder Faces Aug. 19 Deadline to Explain Bitcoin and Crypto Funds

Crypto News

BitMart’s official Chinese-language X account has issued an open letter demanding that founder Sheldon Xia and partner Nancy (Yi) Li explain the exchange’s finances, liabilities, available reserves and the whereabouts of user funds by Aug. 19, or face submission of evidence to regulators, law enforcement and media. The demand escalates a standoff that began when BitMart announced last month it would wind down, with Aug. 26 set as the final trading day. According to the letter, many users still cannot withdraw assets and some employees have not received July salaries or promised compensation. Xia rejected the letter as “fabricated rumors,” saying the account had been compromised and that he would file a police report and send a legal letter to X demanding technical and data forensics. He also argued that employee claims should not be prioritized over customer claims, since everyone is a customer. A user identified as BeardStaff said about $10 million in assets remain trapped, while on-chain investigator ZachXBT questioned the exchange’s liquidity claims, saying an exchange with enough funds should simply return them. The dispute has left customers holding both bitcoin and altcoin positions without a clear path to their money.

Separately, Binance’s bStocks product has overtaken xStocks to become the second-largest tokenized stock issuer by tracked value less than two months after launch. On-chain data tracked by Token Terminal shows bStocks, which issues blockchain representations of traditional equities, reached roughly $624 million on Aug. 3, ahead of xStocks at about $579 million and trailing Ondo Finance at about $927 million. The issuer landscape has shifted sharply as the tokenized stock market has grown. A year earlier, xStocks led with $40.7 million, Robinhood held $37.2 million, and Ondo had about $65,000. The total value tracked by Token Terminal has surged from roughly $80 million to about $2.7 billion over that period. The rapid ascent of bStocks illustrates how established exchanges are leveraging their user bases to compete in tokenization, broadening access to these products beyond the altcoin market. It also highlights how quickly new product categories can scale once a large venue commits to them, with bStocks remaining narrowly behind Ondo in the latest readings.

The BitMart conflict has also exposed another layer of management turmoil. Earlier statements from former global CEO Nenter Chow said he was notified of his termination two days before the shutdown announcement and learned of the decision only when it became public. The Chinese-language X account that issued the Aug. 17 demand said it would accept an independent third-party audit and asked Xia to disclose assets, liabilities, wallets and available reserves, along with a repayment plan detailing ratios and timing. It warned that if no verifiable asset disclosure or repayment plan was provided by the deadline, it would send material to law enforcement, regulators, lawyers and the media. Xia has denied the account’s claims and said he would pursue legal action. The exchange’s official notice states that all spot and futures trading will stop on Aug. 26 and that the platform will fully cease operations on Jan. 31, 2027. With less than a week left before the trading halt, the two versions of events remain unreconciled, leaving users to wait for either an audited accounting or a legal escalation.

The two themes in this session are connected by a single question: can investors trust what a centralized platform says about its own solvency? The primary documents at stake in the BitMart case are the open letter and the exchange’s own wind-down notice, and neither yet provides the verified asset accounting that users have demanded. In an ecosystem where a single airdrop can redirect attention in hours, unresolved liabilities are a slower but more serious test of trust. No independent audit has been published, and Xia’s denial does not confirm the exchange’s financial position. Bitcoin spot is trading near $64,000 at press time, and the asset’s all-time high is not the benchmark for this session; solvency is. On-chain data will be the ultimate check on whether the Aug. 19 deadline produces real transparency or a legal fight, while the growth of tokenized stocks shows the industry is still building new products as old custodial models face stress.