Canadian Crypto Exchange In Lockdown: Trading, Withdrawals Halted After Breach

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After discovering a “security issue,” the Canadian cryptocurrency exchange Catalyx has stopped accepting withdrawals and ceased all trading activities on its platform.

The cryptocurrency exchange’s operator, CatalX CTS Ltd., stated in a press release that an employee may have been involved in the security incident.

The amount of Catalyx’s cryptocurrency holdings that were lost in the hack was not disclosed.

Catalyx Faces Crypto Loss Amid Investigation

The suspension comes after the Alberta Securities Commission filed a cease-trade order on December 21 against the business and co-founder Jae Ho Lee.

The organization opened an investigation because it suspected that one of its employees was involved in the incident, which resulted in a loss of part of the cryptocurrency assets held by Catalyx’s customers.

Caltyx said in a statement on December 28 that “management suspects that this security breach, which may involve an employee, has resulted in the loss of a portion of the crypto assets held by the Company on behalf of its clients.”

Regulators in Canada issued an order to Catalyx last week to stop selling cryptocurrency contracts altogether and launched their own probe into the business.

The 15-day freezing order from the Alberta Securities Commission, which CEO Jae Ho Lee consented to, will expire on January 5.

Total crypto market cap at $1.62 trillion on the daily chart:

The incidents have interfered with the Canadian platform’s regular trading and withdrawal operations.

It said, because of the loss, “all crypto and fiat currency withdrawals from the Platform and all trading activities on the Platform have been temporarily suspended.”

There is a warning banner on the official Catalyx website right now informing users that there are “technical issues” with its platform and that it will notify customers when regular services are back in place.

CataX Engages Deloitte For Forensic Inquiry

In looking into the matter, CataX claimed that international financial auditing firm Deloitte LLP will “offer forensic and investigative services to the organization.” The company disclosed in the statement that it will provide its users with an update following Deloitte’s conclusion of the inquiry.

Lee established the exchange in Calgary in 2018 and has since registered with FINTRAC, Canada’s national financial intelligence agency.

According to a June 21 announcement, the exchange boasted $28 million in monthly trading volume in May 2021, which represented a 73% increase month-over-month at the time and was part of a wider bull market.

Meanwhile, a recent De.Fi analysis estimates that the decentralized finance industry would lose roughly $1.95 billion by 2023. Ethereum, on the other hand, became the blockchain that was most attacked, with 170 breaches resulting in losses of almost $1.35 billion.

Featured image from Shutterstock

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