BitMart accused of insolvency after frozen funds

Matthew Wang, co-founder and CEO of OpenGradient, accuses crypto exchange BitMart of insolvency. His market making team cannot withdraw funds from the platform, and Wang claims that just before the announcement of its closure, the exchange was still actively trying to entice token holders to lock up their tokens.

In brief:

• OpenGradient CEO Matthew Wang says his funds are stuck on BitMart and that the exchange is insolvent.
• BitMart asked token holders to lock up tokens a week before the closure, offering a yield of around 15%.
• BitMart has not yet responded to the accusations, and the claims have not been independently verified.

Funds blocked on an exchange that is closing

Wang shares on X that his market making team has a balance on BitMart that cannot be withdrawn. He cites insolvency of the exchange as the reason. BitMart previously announced its closure, but has not publicly responded to Wang’s allegations.

The accusations have not yet been confirmed by independent sources. Nevertheless, they are causing a stir in the crypto market because they describe a pattern also seen in previous exchange failures: a platform in financial trouble that shows no signs of problems outwardly.

Locked tokens as a disguised liquidity move

What troubles Wang even more is that BitMart approached projects through its PM ops team with a proposal for a so-called locked savings campaign. Token holders were given the opportunity to lock up their tokens on the platform for six months at an annual yield of around 15%. BitMart cited the promotion of long-term holding and the reduction of selling pressure as the goal.

According to Wang, however, this was not an ordinary savings product offering, but an attempt to attract liquidity at a time when the platform was already in financial difficulty. BitMart’s messages to project teams, including those to the OPG team of OpenGradient, date from 13 July, only about a week before the announcement of the closure. Wu Blockchain reports that the accusations have not been independently verified and that BitMart has not responded directly.