BitMart Token BMX Faces $10.1M Withdrawal Freeze

Crypto News

BitMart Token (BMX) has become the focal point of a widening withdrawal dispute after customers reported that $10.1 million remained frozen following the platform’s July 26 wind-down pledge. The exchange had promised an orderly shutdown and continued access to withdrawals, but two weeks later users described stalled requests, missing account managers, and small partial releases that intensified concern. One account said only $5 had been released from a request worth about $24,000. Founder Sheldon Xia broke his silence on August 8, stating that the company had not disappeared and had not misappropriated assets. He said staff were still counting and consolidating holdings and raised the possibility of court involvement and independent auditing. The statement, however, included no reserve figures, no processing schedule, and no repayment timetable. That omission matters because BMX has slid roughly 81% over the past week, and on-chain trackers attributed about $59.3 million in remaining exchange wallets, including $22.5 million in an obscure altcoin, while tracked Bitcoin (BTC) and Ethereum (ETH) balances were only $300,000 and $235,000. Its visible USDC balance was just $436,000, underscoring how thin custodial dollar liquidity had become, especially when compared with experimental algorithmic stablecoins. BMX is also trading more than 90% below its June 2024 all-time high, turning a closure pledge into a solvency test.

The dispute intensified on August 10 when Matthew, a co-founder of decentralized AI network OpenGradient, alleged that his market-making team could not withdraw funds locked on BitMart and questioned whether the platform remained solvent. He did not disclose the amount or assets involved, and the insolvency claim has not been independently verified. His sharper accusation concerned timing: BitMart allegedly continued encouraging token holders to lock assets on the platform about one week before restricting related services, a move he described as a late effort to attract liquidity. BitMart still has not released a complete proof-of-reserves disclosure, despite saying in May that such a report was being prepared. Under the official wind-down plan, the platform stopped accepting new registrations, crypto deposits, fiat deposits, and new spot orders, while futures positions moved to reduce-only mode. Trading is set to stop at 01:00 UTC on August 26, with platform operations due to terminate on January 31, 2027. Customers were advised to file withdrawal requests ahead of the 05:00 UTC August 26 cutoff, after which unresolved requests would enter a separate process that has not been fully explained. That compliance layer, including source-of-funds and wallet-ownership checks, may be lawful, but it has done little to answer the central question: whether customer assets are sufficient to cover all claims.

Public pressure sharpened over the weekend as a user known as BeardStaff claimed that $10.1 million had been inaccessible since July 26 and said a dedicated VIP manager removed his Telegram account on the day withdrawals stalled. A separate account, 0xDeltaHedged, amplified the complaint on August 10 and asserted that BitMart was insolvent, repeating the allegation that token holders had been urged to lock assets shortly before the shutdown. The post described the lockup effort as a liquidity play rather than a voluntary incentive or airdrop. On-chain records cited in the same discussion showed only about 58 addresses successfully withdrawing roughly $805,000 during the first 24 hours after the announcement, with an eight-hour period showing no withdrawals at all. Larger transfers above $25,000 appeared almost halted, while stablecoin liquidity in wallets linked to the exchange was described as extremely low. Those figures do not prove insolvency by themselves, but they contrast with BitMart’s public promise that withdrawals would remain available. The exchange’s earlier crisis also remains relevant: in December 2021, hackers drained as much as $196 million from BitMart wallets, and the platform suspended withdrawals before pledging to compensate users. Five years later, the company again faces questions about whether its internal controls can protect customer funds during stress.

COINOTAG’s analysis ties these developments to one issue: verifiable liquidity. The exchange’s official wind-down notice says withdrawal services remain available and urges customers to submit requests before the August 26 cutoff, but the on-chain record available as of August 10 shows limited successful outflows, thin major-asset balances, and a sharp drop in BMX. Founder statements denying misconduct are not equivalent to an audited reserve report that includes liabilities. Until BitMart publishes asset and liability data that users can test, the insolvency allegation will remain unproven but credible enough to shape behavior. The practical lesson is that exchange wind-downs convert custody risk into settlement risk, and deadlines now matter more than promises.