We sincerely thank our user community for their continued patience.
Since August 2026, BitMart has been reviewing its assets and liabilities and drafting a plan to address the current situation (hereinafter referred to as the "Plan"), reflecting management's commitment to BitMart, the user community, and all stakeholders. While Alvarez & Marsal and White & Case conduct preliminary due diligence, a preliminary intent proposal has been formulated to preserve options for users, allowing them to choose between an upfront distribution or a delayed but potentially higher total recovery from possible recovered or monetized sources. The BitMart management team will continue to contribute under this Plan.
I. Background of Events
We wish to respond to questions raised by the user community regarding the causes leading to the events on July 26, 2026. Based on management's current understanding, the relevant circumstances are as follows.
Crypto Asset Market Downturn, Wash Trading Activities, and Operating Losses
In 2026, the global cryptocurrency market capitalization declined significantly, and the operating environment for crypto exchanges remained severe. BitMart's profits also dropped sharply, partly because wash-trading groups exploited certain rebate and zero-slippage incentive policies in place at the time to improperly profit from BitMart's futures business. These factors led to a significant decline in BitMart's ability to generate profits from fee-based businesses (including trading and token listing services) in 2026, turning operations into losses.
Balance Sheet Gap
As users are aware, BitMart suffered a major hack in December 2021. After the incident, management actively took measures to strengthen security operations and continuously pursued the recovery of stolen assets. Despite this event, profitable operations driven by the then-bullish crypto market allowed BitMart to continue providing services to users for a considerable period afterward. However, the hack caused a loss of BitMart's digital asset reserves and created a balance sheet gap. Valued at December 4, 2021 prices, the related loss was approximately $319.5 million, as detailed below.
Social Media Attacks, Panic Withdrawals, and Risk of Employee Personal Information Leaks
As mentioned above, since May 2026, BitMart has faced a series of social media attacks from wash-trading groups, triggering successive panic withdrawals. Additionally, BitMart-related personnel and employees have faced significant risks of personal privacy exposure and information leaks on multiple social media platforms. Continuous cyberattacks have significantly exacerbated the difficulties in maintaining operations over the past two months.
Against this backdrop, management specifically evaluated a liquidity solution proposed by a digital asset investor who had publicly offered to inject $10 million into BitMart. However, management believes that $10 million in liquidity support is clearly insufficient to resolve the difficulties caused by the aforementioned severe operating environment and balance sheet gap.
II. Proposed Plan
Management believes that the best and fairest resolution for users and stakeholders is to implement a court-approved plan supported by BitMart's assets, allowing each user to choose from multiple options based on their exit preferences, while ensuring management continues to cooperate throughout the process.
USD Conversion and Audit of Account Balances
The preliminary intent proposal currently being considered aims to convert each user's account balance held with BitMart (hereinafter referred to as "Users") into a USD amount (hereinafter referred to as "USD-Converted Account Balance"). To reflect token price fluctuations during the relevant period, the USD-Converted Account Balance will be calculated based on the weighted average trading price of the tokens held in the user's account from July 26, 2026, to a designated record date (hereinafter referred to as the "Record Date"). The valuation and audit of the USD-Converted Account Balance will be handled by personnel appointed by the court, who must perform their duties independently and impartially.
Under the preliminary intent proposal, each User may choose to convert their USD-Converted Account Balance into one of the following options, or a combination thereof. Users should complete their selection on or before the "Selection Deadline," which is expected to be shortly after the approval required for implementation of the Plan. The options listed in the preliminary intent proposal are as follows.
Option 1: Users Wishing to Exit Immediately May Choose Upfront Distribution
Users may choose to receive a pro-rata upfront distribution, with the value derived from fiat assets, stablecoins (including USD Coin (USDC), PayPal USD (PYUSD), and Tether USD (USDT)), and mainstream tokens (including Bitcoin (BTC), Ether (ETH), and Solana (SOL)). This option aims to utilize BitMart's currently available liquid assets to provide an exit path for active users wishing to leave immediately.
Option 2: Users Wishing to Participate in Stolen Asset Recovery May Choose Restitution Tokens
As an alternative to the initial distribution, Users may exchange each dollar of their USD-Converted Account Balance for one unit of a Restitution Token. This token will be backed by recoveries obtained from BitMart's ongoing pursuit of stolen assets. Since December 2021, management has commissioned multiple investigations and forensic inquiries related to the hack and has cooperated with law enforcement agencies to attempt to recover stolen assets. In particular, the latest private forensic investigation report indicates that some related assets remain stored in certain centralized exchanges.
It is expected that management will provide subordinated financing to cover the administrative costs of the Restitution Token and legal fees and other expenses required for recovering stolen assets. Management also welcomes proposals from funders interested in providing litigation financing for stolen asset recovery.
Option 3: Users May Choose Continuum Tokens to Participate in Investments and Other Asset Recoveries
Finally, Users may also choose to exchange their USD-Converted Account Balance for newly issued Continuum Tokens. These tokens can be traded on decentralized exchanges (DEXs) and are backed by the following value sources:
(1) The value of investment interests held by BitMart;
(2) Future disposal proceeds from BitMart's illiquid and/or non-standard assets, which are expected to require a long time to monetize; and
(3) A certain percentage of future distributable profits of BitMart-related projects, only if sufficient funds are secured to restart BitMart's business.
BitMart's illiquid and non-standard assets primarily include several private equity investments and other crypto tokens (AltCoins) held by the company. Such assets may have low liquidity and require longer monetization cycles. Details regarding private equity investments and non-standard assets will be disclosed in the full plan document after the preliminary consultation period ends.
The above assets and cash flows are intended to be held and managed by independent professionals. It is expected that management will provide subordinated financing to cover the administrative costs of the Continuum Token and related special purpose vehicles.
User Consultation and Estimated Recovery Ratios
Over the next three to four weeks, the BitMart team, assisted by advisors, will solicit specific opinions on the proposed plan from the top 50 users by account balance value. The team will update stakeholders on plan adjustments in a timely manner after considering user feedback.
To help users understand the estimated recovery under each option, BitMart is preparing a report to be shared with all users, listing the estimated recovery ratios under the above options. The allocation of entitlements under each option will also be managed or supervised by personnel appointed by the court, who should perform their duties impartially and independently.
III. Preliminary Timeline
If Users have any questions about this preliminary intent proposal, please contact Alvarez & Marsal and White & Case via AlvarezMarsal@bitmart.com.
We thank the user community for their continued patience and support and look forward to constructive cooperation with the user community as we enter the next phase.
BitMart Team
🔗 The full announcement is also available via the BitMart Help Center: https://bitmart.zendesk.com/hc/zh-cn/articles/... (Note: URL truncated in source, preserved structure)
