Canadian cryptocurrency exchange Catalyx suspends trading due to security breach
Key Takeaways
The exchange has temporarily suspended all cryptocurrency and fiat withdrawals on its platform.
The Alberta Securities Commission issued a cease-and-desist order against Catalyx.
Catalyx, a popular Canadian cryptocurrency exchange, has taken significant steps in response to a security breach, suspending all trading activity, deposits, and withdrawals. The company, CatalX CTS Ltd., suspected one of its employees was involved in the incident and launched a thorough investigation.
The exact amount of funds lost has not been disclosed, but the exchange is taking precautionary measures, including temporarily suspending all cryptocurrency and fiat withdrawals from its platform.
Canadian regulators, including the Alberta Securities Commission, issued a cease-and-desist order against Catalyx after the security breach came to light last week. The order restricts trading in all cryptocurrency contracts and includes a 15-day freeze scheduled to expire on January 5.
CEO Jaeho Lee agreed to the freeze order and cooperated with regulators amid an ongoing investigation to assess the potential impact of the security breach on customer funds.
In response to this incident, Catalyx enlisted the services of consulting firm Deloitte to assist with the investigation and determine the extent of the losses. The exchange refrained from disclosing the exact amount of cryptocurrency assets affected by the breach, but acknowledged that some of the assets it held on behalf of customers may have been compromised.
The repercussions of a security breach are evident in the suspension of all trading activity and withdrawals. The official Catalyx website now displays a warning banner informing users of technical issues and promising an update on restoring regular functionality.
The cease-and-desist order issued by the Alberta Securities Commission on December 21, 2023 mandates a 15-day suspension of the respondent’s trading and purchasing of securities or derivatives. This order is granted under sections 33 and 198 of the Securities Act (Alberta) and emphasizes the confidentiality of the evidence admitted.
In addition to Catalyx, several other crypto companies have faced security breaches in recent months. Earlier this month, the OKX decentralized exchange suffered a $2.7 million hack after the private keys of proxy manager owners were leaked. According to the report, by September 2023, the cryptocurrency industry had lost a whopping $1.5 billion due to hacking and fraud.
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