BitMart Hack: Founder Says Security Team Severely Understaffed

Crypto exchange BitMart founder Sheldon Xia said its security team is “severely understaffed” following a new hack, citing threats against employees and alleged retaliation by former staff as obstacles to retaining technical personnel. In a Wednesday post on X, Xia said it took “considerable effort and individual conversations” to persuade some key technical staff to remain and maintain the exchange’s core systems. He added that the company is still “doing everything we can to safeguard data and assets.”

Blockchain analytics firm Bitquery identified approximately $391,000 in suspicious transfers from wallets mostly associated with BitMart across three blockchains. In its Wednesday investigation, Bitquery said it traced the funds to a wallet also implicated in the more than $46 million hack on Brazil’s Mercado Bitcoin on Monday, Nov. 2. The finding supports Xia’s preliminary suspicion of a possible connection, although the link has not been definitively established. Xia described the amount involved in BitMart’s breach as small but did not disclose a figure.

The incident comes amid months of uncertainty over BitMart’s future. The exchange announced in July that it would end trading on Aug. 26 and cease operations in January 2027. Following the announcement, users reported delayed withdrawals and frozen accounts. In August, BitMart’s Chinese-language X account alleged that employees had gone unpaid and demanded answers about customer funds. Xia dismissed the allegations as fabricated, though it remained unclear who controlled the account at the time.

BitMart’s restructuring proposal, published Monday, outlined three potential recovery options for users, including liquid asset distributions and recovery-linked tokens, with plans to seek court approval in December or January. Cointelegraph said it had contacted BitMart for details about the restructuring, security staffing and latest breach but had not received a response by publication.