We would like to express our gratitude for the patience of the community. 

Since August 2026, BitMart has been working to review its asset-liabilities position and to prepare a Plan to address the current situation that reflects the commitment of Management to BitMart, the Community and all its stakeholders. In parallel with the preliminary due diligence by Alvarez & Marsal and White & Case, an initial indicative proposal has since been formulated with a view to preserve optionality for Users to choose either upfront distributions or to receive deferred but potentially higher gross recoveries from potentially recoverable sources. The management team of BitMart will continue to contribute on an ongoing basis under this Plan.

A. What happened?

We would like to answer the Community’s questions on what led to the events leading up to 26 July 2026. Based on Management’s current understanding:

• Bear crypto-market, wash-trading activities and losses: in 2026, the global cryptocurrency market capitalization has significantly decreased, and the operating environment for the cryptocurrency exchange market has remained difficult. There has also been a significant decrease in BitMart’s profits, partly stemming from exploits of its futures business by wash-trading groups that exploited certain rebate and zero-slippage incentive policies which were then in place. As a result of such developments, in 2026, there has been a significant decrease in BitMart’s ability to profit from its fee-earning business (including trading and token listing), and the business became loss-making. 
• Balance sheet deficit: As Users are aware, back in December 2021, BitMart suffered from a major hacking incident. Following the incident, Management took active steps to strengthen the security operations and to make continued efforts to retrieve the hacked proceeds after the incident. Notwithstanding the hacking incident, the profitable operations of BitMart as driven by the then-bullish crypto-markets enabled it to continue to serve its Users for a substantial period of time. Nevertheless, the hacking incident depleted BitMart’s digital asset reserves (approximately US$319.5 million (dollarized as of 4 December 2021) as described below) and caused a balance sheet deficit. Details of the losses are outlined below:

• Social media attacks, panic withdrawals and personal data leaks on staff: As detailed above, since May 2026, BitMart has experienced a series of social media attacks from wash-trading groups which prompted a series of panic withdrawals. In addition, BitMart’s personnel and staff have faced significant risks of personal privacy exposure and personal data leaks in various social media platforms. The continued online attacks have dramatically exacerbated the difficulties in maintaining operations in the past two months. 

In the context of the above, the Management has specifically considered the liquidity solution proposed by a digital asset investor (who publicly proposed to inject US$10 million worth of funds into BitMart). Nonetheless, the Management considers that the US$10 million in liquidity is manifestly insufficient to address the difficulties created by the challenging operating environment and balance sheet deficit identified above. 

B. What is the Plan?

Management believes that the best and fairest solution for Users and stakeholders is to have a court-sanctioned plan which is backed by the assets of BitMart, which enables each User to choose from a menu of Options depending on their exit appetites, while ensuring the continued cooperation from Management in the process. 

The Initial Indicative Plan under consideration contemplates that each User with an outstanding account balance held with BitMart (a “User”) will have their account balances converted into a US-dollar amount (the “Dollarised Account Balance”). The Dollarised Account Balance will be calculated by reference to the weighted average trading price of the relevant token(s) held in that User’s account balance over the period from 26 July 2026 to a specific Record Time, in order to address any token price fluctuations over that period of time. The valuation and adjudication of the Dollarised Account Balance will be carried out by a court-appointed officer, who is required to carry out this duty with independence and impartiality.

Under the Initial Indicative Proposal, each User may choose to exchange its Dollarised Account Balance into one or a combination of the options described below. Election of the Options will take place on or prior to the “Election Deadline” (expected to be a date that falls shortly after the Plan has received the requisite approvals for implementation). Under the Initial Indicative Proposal:

• Upfront Distribution for Users looking to immediately exit (Option 1): Users are entitled to choose to receive an upfront pro rata distribution (comprising value from fiat assets, stablecoins including USD Coin (USDC), PayPal USD (PYUSD), Tether USD (USDT)  and blue-chip tokens including Bitcoin (BTC), Ether (ETH) and Solana (SOL)). This option is specifically designed to enable any active users to achieve immediate exit using BitMart’s currently available liquid assets. 

• Restitution Token for Users who wish to pursue the Hacked Proceeds (Option 2): As an alternative to upfront distributions, Users can exchange each dollar of their Dollarised Account Balances into a unit of Restitution Token, which will be backed by the recoveries from BitMart’s continued pursuit of the hacked proceeds. Since December 2021, Management has instructed multiple investigations and forensic investigations into the hack and has worked with law enforcement agencies in an attempt to recover the proceeds from the hack. In particular, the latest private forensic investigation reports indicated that there are certain pockets of value which are held with certain centralized exchanges. 

  The Management is expected to provide subordinated funding in order to fund the administration of the Restitution Token and the legal fees and expenses for pursuing the hacked proceeds. The Management also welcomes proposals from litigation funders who are interested in providing litigation funding in relation to the recoveries from the hacked proceeds.

• Continuum Token backed by interests in investments of BitMart, disposal proceeds of the illiquid and/or esoteric assets of BitMart and (only if sufficient funding can be obtained to restart the business) potential future distributable profits of BitMart (Option 3): Finally, Users will have an option to exchange their Dollarised Account Balances into a newly minted Continuum Token, which is a DEX-tradable token backed by the value of (a) the investments held by BitMart, (b) future disposal proceeds of its illiquid and/or esoteric assets of BitMart (which are expected to require a long realisation period), and (c) (if sufficient funding can be obtained to restart the BitMart business) a percentage of the future distributable profits of BitMart’s projects. 

  As for the illiquid and esoteric assets of BitMart, these largely comprise discrete private equity investments and AltCoins which form part of the assets of BitMart, and which may have low liquidity and require a longer period of realisation. Details of such private equity investments and esoteric assets will be disclosed in long-form documentation after the initial consultation period.

  These assets / cashflows are to be held and managed by an independent professional. The Management is expected to provide subordinated funding to fund the administration of the Continuum Token and the special purpose vehicle.

Over the course of the next 3-4 weeks, the BitMart team, with the assistance of its advisers, will reach out to consult with its top 50 users by value on the details of the proposed Plan, and will update stakeholders in due course on adjustments to the Plan having taken into account Users’ feedback.

To ensure that Users are informed about the returns under each Option, BitMart is in the process of preparing a report (to be shared with all Users) that will seek to show the estimated returns (in % terms) under each of the Options above. Administration of the distribution of the entitlements under each Option above will similarly be administered or overseen by a court-appointed officer who will be expected to carry out his/her duties impartially and independently.

C. Indicative timetable

If Users have any questions regarding the Initial Indicative Proposal, please reach out to Alvarez & Marsal and White & Case at [email protected].

We thank the Community for your continued patience and support, and look forward to working with the Community constructively as we step into the next phase of this process.

BitMart Team