Bitmart closes cryptocurrency exchange, BMX tokens plummet nearly 63%

Key Points

Bitmart began to close in phases after evaluating its business prospects.

The cryptocurrency exchange will stop all trading services on August 26.

As platform operations are gradually shutting down, the practicality of BMX tokens has weakened.

Bitmart began shutting down its global trading platform on July 26 after evaluating its operating conditions and strategy. The exchange suspended registrations, deposits and new orders at 1:30 UTC. It plans to end all trading services on August 26.

The shutdown is important because customers rely on Bitmart for centralized custody, trading and investment products. The decision also undermines the usefulness of most of the direct platforms that support BMX tokens.

Bitmart shutdown triggers immediate sell-off of BMX tokens

BitMart's native cryptocurrency token, BMX, plunged approximately 63% to 70% in 24 hours. The plunge came after the centralized exchange announced that it would phase out its trading platform operations.

CoinGecko data showed that after a sharp decline, BMX prices were close to $0.164 on July 26. The data tracker recorded 24-hour trading volume of approximately $6.1 million during the market reaction period.

Bitmart's market page once showed a larger decline on the day. The data recorded by each price tracker differs because they use different exchange data sources and update times.

The sell-off reflects the close correlation between BMX and platform trading activity. BMX offers transaction fee discounts and other account benefits in the Bitmart ecosystem. This utility diminishes when cryptocurrency exchanges stop matching orders and close products. However, Bitmart has not released a redemption plan or independent valuation framework for BMX holders.

CoinMarketCap data shows that BMX trading volume has increased as holders respond to the shutdown. Its market data also shows that the token has more than 324 million BMX in circulation.

Bitmart sets trading, withdrawal and account deadlines

Bitmart's official notice stated that futures accounts entered a lightening-only mode on July 26. The spot market stopped accepting new orders, while automated services began to shut down in phases.

The company requires customers to cancel outstanding orders and close positions before 1:00 UTC time on August 26. Bitmart may settle remaining futures positions using applicable marker prices or index prices.

During the phase-out period, the withdrawal function will still be available. The exchange recommends submitting requests before 5:00 UTC on August 26 to reduce processing delays.

Bitmart stated that compliance reviews may delay some withdrawal requests. These reviews may involve identity, wallet ownership, sanctions risks, financial records and travel rule obligations.

Customers are also required to redeem eligible financial management, pledge and lending products. The company requires users to download transaction history and other account records before access is restricted.

Bitmart plans to officially terminate trading platform operations on January 31, 2027. Limited account access may be retained thereafter for query records and withdrawal requests.

Business mechanisms have changed before announcing the shutdown

Bitmart has restricted a number of services before announcing a complete shutdown. The company suspended its automated market-making robot on July 24.

Its notice stated that the system has automatically returned the user's principal and income to the spot account. Customers do not need to submit a separate redemption order.

Bitmart subsequently announced that it would stop spot margin trading. Its support center set the date for the announcement as July 25, one day before the comprehensive shutdown notice.

Another July 23 notice targeted the remaining U.S. related accounts. The exchange requires these clients to close their positions and withdraw assets by August 8. Bitmart said it will stop accepting registrations from new U.S. users in May 2022. However, the company said some old accounts still appear to be associated with U.S. users.

This series of incidents shows that operating restrictions precede the final shutdown announcement. But Bitmart does not list insolvency, regulatory or security incidents as direct triggers. Its notice cited operating conditions, market environment and future strategic directions, but did not provide a detailed balance sheet, reserves or liquidity explanation.

Bitmart's shutdown was preceded by security and financing incidents

Bitmart entered the market in 2017 and expanded its scale by launching small crypto assets. In November 2021, the company announced the completion of Series B financing.

The company said the round of financing valued the cryptocurrency exchange at more than $300 million. Alexander Capital Ventures led the round.

A few days later, the attacker hacked into two hot wallets associated with Bitmart. Externally estimated losses are close to US$196 million and involve a variety of digital assets. Bitmart initially estimated the affected assets to be close to $150 million. CEO Sheldon Xia said the company will use its own funds to compensate users.

The 2026 shutdown notice does not link this incident to the gradual shutdown. The notice also did not state that the client's assets were lost or bankruptcy proceedings had been initiated.

Bitmart's shutdown followed the exit of another centralized exchange the same week. BitMEX said its derivatives exchange will close on September 23. BitMEX attributed its shutdown to a strategic review by HDR Global Trading Limited. The two platforms have published their own timetables, without mentioning the reasons for their joint operations.

Bitmart's next verifiable deadline is August 8 for affected U.S. affiliated users. A broader deadline is August 26, when the cryptocurrency exchange plans to stop trading.