BitMart founder reports security team understaffing amid new hack

Cryptocurrency exchange BitMart is currently operating with a significantly depleted security team, according to founder Sheldon Xia. The admission follows a recent security breach that analysts suggest may be linked to the significant attack on Brazil-based exchange Mercado Bitcoin. The BitMart founder confirmed the incident on Wednesday, noting that the exchange continues to face persistent external threats while navigating a complex organizational restructuring.

BitMart founder addresses security challenges

In a statement posted to X, Sheldon Xia explained that the company has struggled to maintain its technical workforce due to a combination of threats against employees and alleged retaliation from former staff. While Xia noted that individual efforts were successful in retaining key personnel necessary to maintain core systems, the security department remains severely understaffed. He emphasized that the exchange is doing everything possible to protect user assets and data despite these operational constraints.

BitMart's security team is severely understaffed as the exchange faces new hacks during its planned operational wind-down.

Blockchain analytics firm Bitquery conducted an investigation into the incident, identifying approximately $391,000 in suspicious transfers across three different blockchains. The firm traced these funds to a wallet that was also implicated in the $46 million hack of Mercado Bitcoin that occurred on November 2. Xia described the amount involved in the latest BitMart breach as small, though he did not provide an exact figure.

This security incident arrives during a period of significant uncertainty for the platform. In July, the exchange announced that it would cease trading operations by late August and fully shut down by January 2027. Following this announcement, users have reported issues including frozen accounts and delayed withdrawal requests. Additionally, a restructuring proposal released on Monday outlines potential recovery options for users, such as the issuance of recovery-linked tokens or distributions of liquid assets, with court approval anticipated by early next year.

Meanwhile, the broader industry is grappling with security coordination issues. A crypto crime-fighting alliance known as the T3 Financial Crime Unit, which included major players like Tether, Tron, and Binance, has reportedly dissolved. Sources familiar with the matter indicated that the group struggled with slow response times and poor coordination, ultimately disbanding in late August despite having previously assisted in freezing $450 million in illicit assets.

Why it matters

The ongoing security challenges and the planned closure of BitMart create significant uncertainty for users regarding the safety and accessibility of their funds. As the exchange moves toward its 2027 shutdown, the ability of the remaining technical team to secure assets against sophisticated threats remains a critical concern for investors and industry observers alike.