BitMart founder to report alleged employee claims to police

BitMart founder Sheldon Xia says he plans to involve law enforcement and pursue data forensics after employees confronted management over unpaid salaries. The move marks a sharp escalation in what has become an increasingly messy shutdown of the centralized crypto exchange, which announced its wind-down on July 26.

BitMart’s closure was never going to be smooth. The Cayman Islands-registered exchange halted new user registrations immediately when it announced the shutdown, with spot and futures trading set to end by August 26 and full operations winding down by January 31, 2027.

But the timeline has been overshadowed by a cascade of complaints. Users have reported delayed withdrawals. Former employees say they can’t access funds or collect unpaid wages. A Hungarian firm has lodged a police complaint over roughly $80,000 in frozen assets.

On August 8, Xia publicly denied any misappropriation of funds, stating that his core team is conducting an asset inventory and processing withdrawal requests. The denial came amid growing online chatter questioning whether BitMart has the assets to make users whole.

BitMart’s credibility problems didn’t start with this shutdown. The exchange suffered a devastating security breach in December 2021, losing an estimated $150 million to $196 million from its hot wallets. At the time, Xia committed to compensating affected users, a promise that helped the platform survive but left lingering questions about its financial health.

Founded by Xia in 2017 and operational since 2018, BitMart positioned itself as a mid-tier exchange catering to a global audience, particularly among smaller altcoin traders looking for listings that larger platforms wouldn’t touch.

The decision to escalate the employee salary dispute to police is unusual. In most corporate wind-downs, unpaid wages are a liability the company acknowledges and negotiates. Threatening to report your own employees to law enforcement for raising the issue suggests either that Xia believes the claims are fraudulent, or that he’s attempting to control the narrative during a period of intense scrutiny.

The forensics angle likely means examining internal communications, access logs, and potentially blockchain transaction records to determine whether employees made claims that don’t match the company’s records.

The January 2027 final closure date gives BitMart roughly six months to sort through its obligations. In that time, Xia will need to process outstanding withdrawals, resolve employee disputes, and address frozen funds complaints from external parties. The $80,000 Hungarian complaint alone could trigger jurisdictional complications that extend well beyond the planned shutdown timeline.

For the over 300 users per hour still submitting withdrawal requests, none of Xia’s legal maneuvering against employees changes the fundamental question: is their money still there, and will they get it back before the lights go out for good.

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