BitMart faces insolvency claims amid frozen withdrawals

BitMart is facing insolvency allegations following claims from an OpenGradient co-founder that his market-making team is unable to withdraw funds from the exchange. The co-founder alleged that BitMart encouraged users to lock assets shortly before restricting services, a move he described as “shocking.”

While BitMart founder Sheldon Xia has denied misusing funds, the exchange has not released a full proof-of-reserves report. The allegations come as BitMart undergoes a phased shutdown of its global exchange operations, which began on July 26. The platform has already stopped new registrations, deposits, and spot orders, with all trading services scheduled to end on August 26.

BitMart maintains that withdrawals remain available but noted they may be subject to identity checks and security reviews. Other entities, including Scandic Coin, have also reported delays in processing withdrawals.