In Brief:
- BitMart users and employees demand answers from founder Sheldon Lee by August 19, 2026, regarding frozen funds and unpaid salaries.
- Users claim their funds represent significant personal savings, while employees seek overdue wages to cover expenses.
- An ultimatum includes demands for transparency and a repayment plan amid allegations of mismanagement.
BitMart faces mounting pressure over frozen funds
BitMart is under fire from its users and employees as they demand transparent answers regarding significant frozen customer funds and unpaid wages. The ultimatum, issued on August 17, calls for action from founder Sheldon Lee and Yi Li, requesting clarity by August 19, 2026.
Many users report being unable to withdraw funds, which for some, represent years of savings. Employees are also facing financial uncertainty, having not received their most recent salaries. The group emphasized that “this isn’t some business dispute that can just be brushed off with a single ‘ceasing operations’ statement.”
Demands for disclosure
The statement outlines six key demands. Signatories seek full disclosure on wallets, assets, liabilities, and usable reserves. They also want explanations for current withdrawal restrictions and a thorough investigation of affiliated accounts.
Moreover, they are asking for a detailed repayment plan that includes timelines, confirmation of an independent audit, and updates on employee compensation status. Allegations regarding accounts tied to Yi Li, purportedly holding millions, have surfaced but remain unverified.
Should BitMart fail to respond adequately, the group has stated intentions to forward evidence to law enforcement and regulatory bodies.
BitMart’s operations winding down
The exchange announced its decision to cease operations on July 26, 2026, stopping new registrations and deposits. This decision was presented without a specific financial trigger. Customers were informed they could withdraw funds throughout the shutdown.
The operational timeline indicates that all trading will halt by August 26, 2026, and formal closure is set for January 31, 2027. However, withdrawal activity has been abnormally low following the announcement. Only 58 wallets withdrew approximately $805,000 in the first 24 hours, with periods of no withdrawals recorded.
BitMart has indicated it is conducting manual reviews concerning customer data and has not set a maximum processing time for transactions. Paxi Network, an affected project, has publicly demanded access to its funds, stating “these funds do not belong to BitMart.”
Withdrawal restrictions are not new; in May 2026, BitMart noted limits on 239 accounts flagged for subsidy exploitation. The platform previously faced a security breach in December 2021, leading to the loss of $196 million in assets.
Impact on gaming ecosystem
While this situation does not directly involve any game, it poses risks to the broader crypto gaming community. Centralized exchanges like BitMart serve as critical points for converting gaming tokens and managing funds.
Many smaller cap tokens, including gaming assets, were listed on BitMart, making it a significant liquidity source for such projects. An unexpected shutdown can disrupt trading capabilities and freeze project funds. Paxi Network’s predicament exemplifies this risk.
The incident underscores a recurring lesson in the industry: assets held on an exchange function as claims against that exchange, not as personal property. Self-custody eliminates counterparty risk but shifts the burden of security to the holder.
For guilds and tournament organizers, the concentration of funds on one platform raises the stakes. A sudden shutdown can hinder their ability to pay scholars or distribute prizes, highlighting the importance of diversification in fund management.
