Canadian Crypto Exchange Catalyx Suspends Trading Amid Security Breach

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Key Takeaways

  • Exchange has temporarily halted all crypto and fiat currency withdrawals from its platform.
  • Alberta Securities Commission has issued a cease-and-desist order against Catalyx. 

Catalyx, a prominent Canadian cryptocurrency exchange, has taken a significant step by suspending all trading activities, deposits, and withdrawals in response to a security breach. The company, CatalX CTS Ltd., suspects the involvement of one of its employees in the incident and has initiated a thorough investigation. 

Although the exact extent of the funds lost has not been disclosed, the exchange is taking precautionary measures by temporarily halting all crypto and fiat currency withdrawals from its platform.

The security breach came to light last week, prompting Canadian regulators, including the Alberta Securities Commission, to issue a cease-and-desist order against Catalyx. This order restricts all trading of crypto contracts and includes a 15-day freeze, set to expire on January 5. 

CEO Jae Ho Lee has cooperated with regulators, consenting to the freeze order, as investigations are underway to assess the potential impact of the security breach on customer funds.

In response to the incident, Catalyx has enlisted the services of consulting firm Deloitte to aid in the investigation and determine the extent of the losses. The exchange has refrained from disclosing the precise amount of crypto assets affected by the breach but acknowledged that a portion of assets held on behalf of clients may have been compromised.

The aftermath of the security breach is evident in the suspension of all trading activities and withdrawals. The official Catalyx website now displays a warning banner, notifying users of technical difficulties and promising updates on the restoration of regular functions.

The cease-and-desist order, issued on December 21, 2023, by the Alberta Securities Commission, enforces a 15-day pause on trading and purchasing securities or derivatives by the respondents. The order is granted under sections 33 and 198 of the Securities Act (Alberta) and emphasizes the confidentiality of admitted evidence.

Apart from Catalyx, several other crypto firms have faced security breach in recent months. Earlier this month, OKX decentralized exchange suffered a $2.7 million hack after the private key of the proxy admin owner was leaked. As per reports, until September 2023,  the crypto industry has suffered a staggering $1.5 billion in losses due to hacks and scams.

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Saniya Raahath
Saniya Raahath

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