BitMart Proposes Court-Backed Plan Offering Users Payouts or Tokens Tied to Its 2021 Hack
By Unchained
AI summary of the source article
BitMart has unveiled a preliminary repayment proposal seeking court sanction after winding down its trading platform. The plan converts user balances into a single dollar valuation, offering three recovery options: an upfront pro rata share of liquid assets, a Restitution Token backed by recovered funds from its $319.5 million 2021 hack, or a tradable Continuum Token backed by illiquid holdings and potential future profits. BitMart attributed its financial shortfall to the 2021 hack, wash-trading exploits, and subsequent panic withdrawals, while rejecting a $10 million rescue offer as insufficient. The exchange expects to file the proposal in court by December or January.
Why it matters
The proposal offers a structured resolution process for affected depositors as a creditor group organized by Echo Base considers forcing the exchange into involuntary bankruptcy.
Key facts
- Users can choose between an upfront pro rata cash and crypto payout, a hack-recovery token, or a token backed by illiquid assets and future profits.
- BitMart links its shortfall to a $319.5 million hack in December 2021, wash-trading exploits, and panic withdrawals.
- A group of claimholders organized by distressed-asset firm Echo Base has weighed pushing BitMart into involuntary bankruptcy.