Echo Base formed an ad hoc committee of BitMart claimholders after the exchange ignored its $10 million proposal to fund a pre-negotiated bankruptcy filing. The committee has retained legal counsel and is weighing involuntary insolvency proceedings as BitMart has remained silent since late August.
Echo Base assembled a creditor group for BitMart customers on Sept. 2, weeks after the exchange went silent on a $10 million offer to sponsor a court-supervised wind-down.
"BitMart still has time to run an orderly wind-down. What it does not have is anyone willing to put capital behind one," Roshan Dharia, chief executive officer of Echo Base, said. "Out of court there is no stay, so a single claimant can stall the process for everyone, and any holder the company cannot reach retains its claim indefinitely. That is not a wind-down, it is an open liability with a queue attached."
Echo Base submitted the restructuring proposal Aug. 6, committing up to $10 million to fund professional and administrative costs through plan confirmation. BitMart did not respond. An Echo Base affiliate separately delivered a formal demand Aug. 8 over an unexecuted withdrawal instruction submitted July 24 — 31 hours before BitMart announced it would cease operations — documenting 15 separate contact attempts. BitMart also did not respond to that demand.
The ad hoc committee represents a growing aggregate balance of frozen customer assets and has retained Young Conaway Stargatt & Taylor LLP and Ashbury Legal PC. It is evaluating legal, regulatory and insolvency remedies, including whether qualifying creditors can commence or join an involuntary insolvency proceeding. Based on its review of BitMart's User Agreement, the committee's position is that title to customer assets does not transfer to the exchange, a finding that could shape how frozen funds are treated in any insolvency case.
BitMart has not posted on X since Aug. 21, when it said it was developing a restructuring plan with a phased resumption of certain operations and promised an update by Sept. 9. Sonn Law Group has separately opened an investigation for BitMart users with $500,000 or more trapped on the exchange, adding pressure on the platform to address frozen funds.
Dharia warned the window for an orderly resolution is narrowing. "Administering a book this size takes years, and BitMart has publicly committed to a process it cannot staff past January," he said. "We have the capital, infrastructure and expertise to run a compliant and orderly run-off. Every week this goes unanswered, the version that remains available narrows. Our proposal has been outstanding since Aug. 6."
The committee has requested that BitMart engage with claimholders before additional remedies are pursued. No determination has been made on commencing any particular proceeding, and the committee continues to evaluate options with counsel.
This article is for informational purposes only and does not constitute investment advice.
