The ongoing saga surrounding the closure of the BitMart cryptocurrency exchange has taken a bizarre and dramatic turn. In an unexpected public showdown, BitMart’s official Chinese-language X account has openly demanded that founder Sheldon Xia explain the exact whereabouts of user funds. While the account threatens legal and regulatory action, Xia is vehemently denying the allegations, setting the stage for a tense standoff as the exchange prepares to shut its doors for good.
Internal Revolt or Hijacked Account? The Ultimatum Given to Sheldon Xia
The drama unfolded on Monday when BitMart’s Chinese-language X account posted a shocking public ultimatum directed at the company’s own founder. The post demanded that Sheldon Xia produce a comprehensive repayment plan and fully disclose the exchange’s wallets, available reserves, liabilities, and assets by Wednesday, August 19. According to a machine translation of the fiery post, the account claimed that multiple users are still completely unable to withdraw their funds and that several employees have been left without their final paychecks or severance compensation.
If these demands for verifiable asset disclosure are not met by the deadline, the account threatened to escalate the situation drastically. The author of the post warned that they would hand over damning evidence to law enforcement, financial regulators, legal teams, and media outlets. It remains entirely unclear who is actually operating the account right now, leading to widespread speculation over whether this is a genuine internal revolt by disgruntled employees or if the official account has been compromised by an outside party.
This public conflict comes on the heels of BitMart’s July 26 announcement that it would be entirely winding down its operations following the collapse of its native BMX token and widespread reports of withdrawal delays. As part of the ongoing shutdown process, the platform has already halted all new registrations and deposits. Trading is scheduled to officially end on August 26, with the entire exchange ceasing operations by January 31. Management had previously warned users that remaining withdrawals might be subjected to extended security and compliance reviews.
Sheldon Xia Fires Back at Fabricated Allegations
Sheldon Xia did not take the public accusations lightly, quickly taking to X on Monday to defend himself and the exchange. He completely dismissed the claims made by the Chinese-language account, labeling the allegations of blocked withdrawals and unpaid salaries as entirely fabricated rumors. Xia stated that his team has already preserved all the necessary evidence from the social media posts and is fully prepared to take aggressive legal action to clear his name.
In his response, Xia announced that the company plans to file an official police report and serve a lawyer’s letter directly to X during United States business hours, demanding full technical and data forensics to uncover who is behind the rogue posts. He also firmly pushed back against rumors that employee payouts were being prioritized over everyday customer withdrawals. Xia insisted that everyone is treated as a client with absolutely no special privileges given to insiders, reiterating his previous denials that BitMart had ever misappropriated any user assets.
Despite Xia’s reassurances, on-chain data paints a picture of rapidly moving funds. According to blockchain intelligence firm Arkham, crypto wallets publicly attributed to BitMart held approximately $36.5 million in digital assets as of Monday. This is a significant drop from the roughly $71 million held on July 26, and the $102 million recorded just a few weeks prior on July 6. While this steep decline is notable, experts caution that these tracked wallets might not represent the entirety of the assets controlled by the exchange, making it difficult to determine how much of the drain is due to legitimate customer withdrawals, internal asset consolidation, or transfers to unknown cold storage wallets.
