BitMart Accused of Insolvency as Withdrawals Stay Frozen

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SUMMARY

• OpenGradient co-founder Matthew Wang publicly accused BitMart of insolvency after his market-making funds became inaccessible on the exchange.
• Wang alleges BitMart pushed high-yield staking products a week before announcing its shutdown to lock in user liquidity.
• On-chain data shows withdrawals above $25,000 have largely stalled, and BitMart has not published a proof-of-reserves report.
• Founder Sheldon Xia denies any misappropriation, blaming delays on internal asset consolidation and manual reserve checks.

Matthew Wang, co-founder and CEO of decentralized AI network OpenGradient, has accused BitMart of insolvency after his firm’s market-making capital remained frozen on the exchange in the middle of its ongoing wind-down.

Wang, whose company raised $8.5 million from investors including a16z crypto, Coinbase Ventures and SV Angel, posted on X that his team could not get execution requests processed on BitMart, describing the platform as functionally insolvent rather than simply delayed. Before starting OpenGradient, Wang worked in quantitative equity options market-making at Two Sigma, a background he pointed to as the basis for his read on BitMart’s liquidity position. BitMart is the third mid-sized centralized exchange to announce a shutdown within weeks, following AscendEX and BitMEX.

Wang says BitMart marketed high-yield lockups days before closing

Wang’s more pointed claim concerns timing rather than delay. He noted that roughly a week before BitMart announced its shutdown, the exchange ran an aggressive campaign promoting high-APY staking and locked savings products to both token projects and retail users. He called this a deliberate liquidity play, arguing BitMart used the promise of high yields to pull fresh capital in right before cutting off access to it entirely.

If that sequence holds up, users who moved funds into locked products in late July now cannot retrieve them at all, which would put them in a worse position than users facing standard withdrawal delays elsewhere on the platform.

Five months from first notice to full shutdown

Lookonchain data undercuts BitMart’s “orderly” framing

BitMart maintains that withdrawal channels remain open, but on-chain tracking paints a different picture. Analytics group Lookonchain found that withdrawals above $25,000 have effectively stopped moving, with several projects and high-net-worth accounts reporting pending requests ranging from the millions into the tens of millions of dollars. Only 58 wallets withdrew funds in the 24 hours after BitMart’s shutdown announcement, totaling roughly $805,000. For an exchange of BitMart’s size, that is a trickle. One eight-hour window in that period saw zero withdrawals processed at all. Smaller retail withdrawals may still clear. Larger institutional and market-maker balances, including Wang’s, stay stuck.

BitMart has also not published a proof-of-reserves report during the wind-down. For an exchange facing public insolvency allegations, that absence removes the one document that could mathematically confirm client assets remain backed one-to-one, leaving the dispute to play out through screenshots, on-chain trackers and dueling public statements instead. The market has already priced in the uncertainty. BMX, BitMart’s native token, fell more than 80% over the following week, trading near $0.057 after sitting above $0.30 just days earlier.

Xia denies fleeing, points to internal reserve audit

BitMart founder Sheldon Xia addressed the allegations on August 8. He stated the company has not fled and does not intend to, and asked users to disregard screenshots and leaks circulating from current or former employees, framing them as unreliable.

Xia attributed the delays to systemic maintenance and an internal asset consolidation process, describing a core team working through manual reserve inventory checks rather than any deliberate withholding of funds. He denied that customer assets had been misused or withdrawn early, and said management plans to bring in third-party auditors and, if necessary, courts to produce a transparent accounting of the exchange’s financial position.

Two accounts that cannot both be right

BitMart frames the slowdown as an operational bottleneck. The company insists the shutdown remains solvent and orderly. Whether BitMart can process the backlog before its August 26 trading halt will be the clearer test. A published proof-of-reserves report, something the exchange has so far declined to produce, remains the single document that could settle the dispute without relying on competing public statements.

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