BitMart founder Sheldon Xia confirmed Wednesday that the exchange suffered a new security breach on Monday and disclosed that its security team is 'severely understaffed' amid a wind-down and restructuring process. Blockchain analytics firm Bitquery traced approximately $391,000 in suspicious transfers from BitMart-associated wallets to an address implicated in the $46 million hack of Brazil's Mercado Bitcoin on Nov. 2.
Key Takeaways
- BitMart confirms new hack Monday; founder admits security team 'severely understaffed' due to threats and staff departures.
- Bitquery traces ~$391,000 in suspicious transfers to wallet linked to $46M Mercado Bitcoin hack (Nov. 2).
- Exchange is winding down (trading halted Aug. 26, full cessation Jan. 2027) and pursuing court-supervised restructuring in Dec/Jan.
- Users face frozen withdrawals and uncertain recovery via three proposed options: liquid distributions or recovery tokens.
- T3 Financial Crime Unit (Tron, Tether, TRM, Binance) disbanded in August amid coordination failures, per Bloomberg.
Executive Intelligence Brief
Security Staffing Crisis Amid Wind-Down
In a post on X, Xia attributed the staffing shortfall to threats against current employees and alleged retaliation by former staff, which complicated efforts to retain technical personnel. "It took considerable effort and individual conversations to persuade some key technical staff to remain and maintain our core systems," Xia wrote. He described the amount lost in Monday's hack as small but did not disclose a specific figure.
The exchange announced in July that it would cease trading on Aug. 26 and wind down operations by January 2027. Since that announcement, users have reported delayed withdrawals and frozen accounts. In August, BitMart's Chinese-language X account alleged employees had gone unpaid, though Xia dismissed the claims as fabricated.
On-Chain Link to Mercado Bitcoin Exploit
Bitquery's Wednesday investigation identified suspicious transfers across three blockchains originating from wallets mostly associated with BitMart. The funds were traced to a wallet also implicated in the more than $46 million Mercado Bitcoin hack on Monday, Nov. 2, supporting Xia's preliminary suspicion of a connection between the incidents. The Mercado Bitcoin breach ranks among the largest exchange hacks this year.
Restructuring Proposal and Creditor Uncertainty
On Monday, BitMart published a restructuring proposal outlining three potential recovery options for users, including liquid asset distributions and recovery-linked tokens. The exchange plans to seek court approval in December or January. Cointelegraph contacted BitMart for details on the restructuring, security staffing, and latest breach but had not received a response by publication.
Industry Crime-Fighting Alliance Dissolves
Separately, Bloomberg reported Wednesday that the T3 Financial Crime Unit — an alliance formed by Tron, Tether, and TRM Labs in September 2024 and later joined by Binance — has dissolved. Sources cited slow responses and poor coordination; the group reportedly disbanded in late August. In May, T3 claimed it had helped freeze more than $450 million in assets linked to suspected criminal activity since its launch. The dissolution coincides with a wave of major hacks, including the $6.3 billion Binance breach reported last week.
