BitMart founder denies fund misuse allegations as withdrawals accelerate

Nearly three weeks after BitMart announced its shutdown, concerns have grown over delayed withdrawals.

BitMart founder Sheldon Xia responded to increasing speculation surrounding the issue. He denied allegations of misappropriating customer deposits or removing them before announcing the shutdown.

In his defense, Xia claimed he did not abandon his duties in relation to the exchanges.

He also urged users to rely on verified information posted through official channels rather than unsubstantiated claims allegedly made by either current or former employees. However, withdrawals will continue to be the most reliable indicator that these assurances are valid.

Shortly after the 26th of July announcement, Lookonchain recorded 58 wallets withdrawing about $805,000, including an eight-hour period with no withdrawals. Meanwhile, BitMart-linked holdings fell from roughly $102 million to $69–71 million, though internal movements complicate that decline.

Therefore, Xia’s consideration of court involvement and independent third-party auditors becomes important. Verified asset disclosures and improving withdrawal throughput would provide stronger evidence that customer funds remain accounted for.

BitMart withdrawal processing accelerates

More importantly, the acceleration in withdrawals offers evidence against the earlier stagnation that had fueled concerns around BitMart’s remaining assets. While ETH withdrawals were limited in early August, activity surged to over 200 per hour starting on the 7th of August.  

Activity then exceeded 200 transactions per hour, while several periods approached 400, with the latest pace averaging roughly 300 hourly. This rate of processing indicates that BitMart has progressed from merely reviewing its assets to actively satisfying withdrawal requests.

Moreover, sustained processing could gradually reduce the backlog and ease pressure from customers awaiting funds. However, the exchange has not disclosed total outstanding liabilities, making the scale of progress difficult to measure.

Therefore, sustaining an average rate of 300 hourly or higher for both ETH and all other assets remains necessary. Higher levels of withdrawals would support Xia’s claims. Conversely, if withdrawals again slow down, liquidity concerns could rise once again.

Unpaid obligations test BitMart’s wind-down

Yet clearing customer withdrawals addresses only one side of BitMart’s financial obligations. Reports of unpaid wages create competing claims against remaining assets. As funds leave, BitMart must balance customer repayments with employee and operating liabilities.

Moreover, asset quality matters because less-liquid holdings may provide weaker coverage. Without disclosed liabilities or independent reconciliation, the exchange’s financial position remains unclear.

Ultimately, an orderly wind-down requires enough resources to settle customers, employees, and other creditors without leaving unresolved obligations behind.

Final Summary

• BitMart founder Sheldon Xia addressed withdrawal concerns, denying asset misuse as the exchange continues its wind-down.
• BitMart’s faster withdrawals signal progress, but unpaid obligations and undisclosed liabilities leave the wind-down’s outcome uncertain.