Echo Base forms BitMart creditor committee after exchange ignores $10M bankruptcy offer

Following BitMart's July 2026 shutdown announcement, special-situations firm Echo Base has formed an ad hoc committee of claimholders represented by Young Conaway and Ashbury Legal. The move comes after BitMart ignored Echo Base's $10 million pre-negotiated bankruptcy offer and left customer withdrawals frozen. While BitMart founder Sheldon Xia denies misappropriating funds, the exchange has appointed White & Case and promised a restructuring roadmap by September 9, 2026.

BitMart operations shutdown

• ▪BitMart announced on July 26, 2026, that it would begin an orderly wind-down of its operations, halting new accounts, deposits, and fresh orders on the same day.
• ▪The announcement of BitMart's shutdown caused its native BMX token to crash by more than 60% within 24 hours.
• ▪BitMart suspended spot and futures trading services on August 26, 2026, as part of its wind-down process.

Echo Base $10M bankruptcy proposal

• ▪BitMart did not respond to Echo Base's $10 million restructuring proposal as of September 2, 2026.
• ▪The proposed $10 million commitment from Echo Base was intended to fund professional and administrative costs through the confirmation of a restructuring plan.
• ▪Echo Base submitted a written proposal to BitMart management on August 6, 2026, offering up to $10 million to sponsor a pre-negotiated bankruptcy filing.

Ad hoc creditor committee formation

• ▪Echo Base organized an ad hoc committee of BitMart claimholders on September 2, 2026, representing a growing aggregate balance of frozen customer assets.
• ▪The ad hoc committee of BitMart claimholders retained the law firms Young Conaway Stargatt & Taylor and Ashbury Legal to evaluate recovery options.
• ▪The ad hoc committee is evaluating whether qualifying creditors could commence or join an involuntary insolvency proceeding against BitMart.

Customer asset ownership dispute

• ▪The ad hoc committee's legal position, based on BitMart's User Agreement, is that title to customer digital assets remains with the users and does not transfer to the exchange.
• ▪No court has determined whether customers retain ownership rights over digital assets held through BitMart accounts.
• ▪BitMart founder Sheldon Xia denied on August 8, 2026, that the exchange had misappropriated customer assets, stating his team was still tallying assets.

Frozen withdrawal complaints

• ▪BitMart customers reported that their asset withdrawal requests remained pending despite BitMart's initial notice that withdrawals would remain available.
• ▪The Echo Base affiliate delivered a formal demand to BitMart on August 8, 2026, documenting 15 unanswered contact attempts regarding the unexecuted withdrawal.
• ▪An Echo Base affiliate requested an asset withdrawal on July 24, 2026, approximately 31 hours before BitMart announced its closure, which remains unexecuted.

BitMart restructuring timeline

• ▪BitMart appointed White & Case as restructuring counsel and promised to deliver a detailed restructuring roadmap to users by September 9, 2026.
• ▪BitMart initially planned to cease platform operations on January 31, 2027, but later stated it was developing an alternative restructuring plan.

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