BitMart proposes court-sanctioned repayment plan offering cash or recovery tokens
BitMart has unveiled a preliminary repayment plan that converts user balances into dollar claims and offers distributions in liquid assets or tokens tied to recoveries from its 2021 hack.
BitMart has published a preliminary proposal to repay users more than two months after beginning to wind down its exchange operations, stating that it will seek court sanction for the restructuring. Under the proposal, each user account would be converted into a single dollar balance based on the weighted average of token trading prices from July 26 to an unset record date, with valuations determined by a court-appointed officer.[2]
According to the exchange, customers could select or combine three settlement tracks: an upfront pro rata payout of liquid assets such as fiat, stablecoins, bitcoin, ether, and solana; a Restitution Token backed by assets recovered from its December 2021 hack; or a Continuum Token backed by illiquid holdings and future business profits. BitMart noted that private forensic investigations have identified pockets of stolen hack funds currently held on centralized exchanges.[2]
The platform attributed its deficit in part to the 2021 security breach, which drained roughly $319.5 million in reserves, as well as wash-trading manipulation in its futures business and a wave of panic withdrawals since May. BitMart stated that a $10 million injection offer from an unnamed investor was manifestly insufficient to address its obligations. Advised by Alvarez & Marsal and White & Case, the exchange plans to collect user feedback before applying for court approval in December or January.[1][2]
Key facts
- BitMart published a preliminary repayment plan more than two months after starting to wind down its trading platform.
- Account balances would be valued in dollars by a court-appointed officer using weighted average prices from July 26 to a future record date.
- Users could choose an immediate pro rata payout of liquid assets, Restitution Tokens backed by 2021 hack recoveries, or Continuum Tokens backed by illiquid assets and future profits.
- BitMart's December 2021 hack drained about $319.5 million of reserves, including $164.1 million in ether and $96.5 million in BNB.
- The exchange rejected a $10 million funding proposal from an unnamed digital asset investor as manifestly insufficient.
- BitMart intends to consult top users through October, revise its plan in November, and seek court approval in December or January.
Sources · 2 sources
- LS
Laura Shin@laurashinPost on X ·
BitMart says its December 2021 hack depleted about $319.5 million of its reserves. It is targeting December or January to take its user repayment plan to court. https://t.co/hz6kLnwtNM
Open source - UN
UnchainedArticle ·
BitMart Proposes Court-Backed Plan Offering Users Payouts or Tokens Tied to Its 2021 Hack BitMart has published a preliminary plan for repaying its users, more than two months after the crypto exchange began winding down its trading platform. Under the proposal, released on Wednesday, each user’s account would be turned into a single dollar figure, priced at the weighted average of their tokens’ trading prices from July 26 to a record date that has not yet been set. A court-appointed officer would value those balances, and BitMart said it wants a court to sanction the plan. Users could then take one of three routes, or mix them: An upfront payout. Users who want out now would get a pro rata share of BitMart’s liquid assets, including fiat, stablecoins such as USDC, PYUSD and USDT, and bitcoin, ether and solana. A Restitution Token. Each dollar of balance would convert into one token backed by whatever BitMart recovers from its December 2021 hack. BitMart said its latest private forensic reports found “certain pockets of value which are held with certain centralized exchanges.” A Continuum Token. This token would trade on decentralized exchanges and be backed by BitMart’s investments, sales of hard-to-sell holdings like private equity stakes and altcoins, and a cut of future profits if BitMart can raise money to restart the business. BitMart said it is drafting a report estimating the percentage return under each route. Over the next three to four weeks, it plans to consult the 50 users holding the most value on the exchange. How BitMart Explains the Shortfall BitMart said the 2021 hack drained about $319.5 million of its reserves, valued as of Dec. 4, 2021, including $164.1 million in ether and $96.5 million in BNB. That left a hole in its balance sheet, though BitMart said profits from the bull market at the time let it keep serving users for years afterward. The exchange also pointed to a weaker crypto market in 2026 and to wash-trading groups that it said exploited rebate and zero-slippage incentives in its futures business, pushing the company into losses. Since May, social media attacks by those groups set off “a series of panic withdrawals,” BitMart said in its announcement . The exchange also said it had weighed an unnamed digital asset investor’s public offer to inject $10 million, but wrote in the announcement that the sum “is manifestly insufficient to address the difficulties” it faces. What Comes Next The exchange plans to take feedback through October, adjust the plan in November, and apply to the courts in December or January . Alvarez & Marsal and White & Case are advising. BitMart has acknowledged restricting withdrawals, and a group of claimholders organized by distressed-asset firm Echo Base has been weighing whether to push the exchange into involuntary bankruptcy. Related Listen: How Bitget Is Chasing $388 Million in Stolen Funds After a Zero-Day Hack The post BitMart Proposes Court-Backed Plan Offering Users Payouts or Tokens Tied to Its 2021 Hack appeared first on Unchained .
Open source