On September 30, BitMart publicly acknowledged a shortfall in its asset reserves and presented a preliminary plan to address the situation with its users. The exchange attributed this deficit primarily to a 2021 hack that resulted in a loss of $319.5 million.
— BitMart (@BitMartExchange) September 30, 2026
The proposed plan is not yet finalized. BitMart aims to undergo a restructuring process, pending court approval, and will offer users several options for asset recovery.
According to the exchange, of the $319.5 million lost, $164.1 million was in Ethereum, $96.5 million in BNB, $51.5 million in Bitcoin, and $7.4 million in other assets, based on prices from December 4, 2021.
Following the hack, the exchange managed to continue operations through revenues generated by a booming crypto market. However, by 2026, the situation worsened as BitMart reported declines in trading commission income and losses in its futures business.
The platform claimed that groups of traders exploited commission rebate programs and zero slippage for arbitrage purposes. Since May, the situation intensified due to mass fund withdrawals prompted by social media posts.
BitMart also considered an investor's offer of $10 million in liquidity but deemed the amount insufficient to address the deficit.
Three Options for Users
According to the preliminary plan, account balances will first be converted into a dollar equivalent. The conversion will be based on the weighted average price of the relevant tokens from July 26 to a date yet to be determined. An independent expert appointed by the court will conduct an assessment of the claims.
After this, users will be presented with three options:
- Proportional Share of BitMart's Liquid Assets. This may include fiat currencies, USDC, PYUSD, USDT, Bitcoin, Ethereum, and Solana. The percentage of claims that can be satisfied this way remains uncertain.
- Restitution Token. This token will be backed by funds that BitMart can recover post-2021 hack. The company claims that a recent private investigation uncovered some assets related to the attack on centralized exchanges.
- Tradable Continuum Token on DEX. The value of this token will depend on BitMart’s investment assets, the sale of illiquid investments, and, if the exchange secures funding and resumes operations, a portion of future profits. The company indicated that such assets include stakes in private companies and illiquid altcoins.
In the next three to four weeks, BitMart plans to discuss the proposal with its 50 largest clients by account balance. The exchange is also preparing calculations for all users regarding the expected recovery percentage for each option.
A consultation is scheduled for October, with adjustments to the plan expected in November based on feedback. BitMart anticipates filing for court approval of the plan in December 2026 or January 2027.
From Closure to Restructuring
On July 26, BitMart announced a phased closure after nine years of operation. At that time, the exchange did not disclose the specifics of its financial shortfall, citing "operational conditions, market environment, and future strategic direction" as the reasons for its decision.
Trading was halted on August 26, with a complete shutdown planned for January 31, 2027.
Following the announcement, users began reporting delays in withdrawals. On August 8, BitMart's founder, Sheldon Xia, dismissed allegations of misappropriating user assets, stating that the team was conducting an inventory and consolidating funds.
On August 21, the platform initiated restructuring as an alternative to full closure. This project aims to gradually resume some operations while making payments to creditors. At that time, BitMart engaged White & Case as legal counsel.
On September 9, the company appointed Alvarez & Marsal as a financial advisor to assess its situation, assets, and potential paths forward.
It’s worth noting that another centralized exchange, BitMEX, also announced its closure in July, ceasing operations entirely on September 23.
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