CatalX CTX Ltd., the operator of the Canadian cryptocurrency exchange Catalyx, has taken an extraordinary measure by suspending all trading, deposits, and withdrawals following a security breach.
This incident has reportedly led to the loss of some customer funds, prompting immediate action from the platform.
In an official press release, CatalX CTX Ltd. acknowledged the security breach and announced the initiation of an investigation to uncover the details surrounding the incident.
The company did not disclose the exact extent of the financial losses, but concerns are mounting over the potential impact on users’ assets.
The nature of the security breach is currently under intense scrutiny, with the company hinting at the possibility of internal involvement, potentially by one of its employees.
This revelation adds a layer of complexity to the ongoing investigation, as both authorities and the company strive to ascertain the full scope of the incident.
Compounding Catalyx’s challenges, Canadian regulators recently intervened, instructing the exchange to cease all trading activities related to cryptocurrency contracts.
Simultaneously, regulatory authorities launched their own inquiry into the company’s operations.
In response to the regulatory directive, Catalyx CEO Jae Ho Lee agreed to a 15-day freeze order imposed by the Alberta Securities Commission.
This freeze order is slated to conclude on January 5, during which time further investigations are expected to shed light on the circumstances surrounding the security breach.
To provide a concise summary: “Canadian cryptocurrency exchange Catalyx has temporarily halted withdrawals and trading activities on its platform due to a suspected ‘security incident,’ potentially involving one of its employees.
The extent of crypto losses resulting from the incident remains undisclosed.”
Furthermore, in a related development, Bitstamp has announced its decision to cease operations in Canada starting January 8, 2024.
This move follows the earlier departures of Binance and Bybit from the Canadian market.
Bitstamp CEO Bobby Zagotta expressed appreciation for Canadian customers but attributed the decision to new regulatory dynamics.
Customers are allowed to withdraw funds until January 8, after which account deactivation will be mandatory.
Bitstamp’s exit aligns with a broader industry trend, where major exchanges have exited the Canadian market due to evolving regulatory changes and market conditions.
The Canadian Securities Administrators recently allowed specific stablecoin trading under certain conditions, reflecting the evolving regulatory landscape.
Bitstamp’s departure underscores the challenges faced by the cryptocurrency industry as it navigates shifting compliance demands.