CatalX CTX Ltd., the company behind the Canadian crypto exchange Catalyx, has taken the unprecedented step of suspending all trading, deposits, and withdrawals in the wake of a security breach. The breach has reportedly resulted in the loss of some customer funds, prompting swift action from the platform.

Concerns Rise over Financial Losses

CatalX CTX Ltd. issued a press release acknowledging the security incident and revealed that an investigation has been launched to uncover the details surrounding the breach. While the company did not disclose the extent of the financial losses, concerns are escalating over the potential impact on users' assets.

The nature of the security breach remains under scrutiny, with the company suggesting the possibility of an internal involvement, possibly by an employee. This revelation adds another layer of complexity to the ongoing investigation as authorities and the company work to ascertain the full extent of the incident.

Compounding Catalyx's woes, Canadian regulators recently intervened, directing the exchange to halt all trading activities related to crypto contracts. Concurrently, regulatory authorities initiated their investigation into the company's operations. In response to the regulatory directive, the CEO of Catalyx, Jae Ho Lee, consented to a 15-day freeze order imposed by the Alberta Securities Commission. The freeze order is set to expire on January 5, during which time further investigation is expected to shed light on the circumstances surrounding the security breach.

Translated by Google, it reads: Canadian exchange Crypto Catalyx 🇨🇦 has paused withdrawals and suspended all trading activities on its platform after discovering a "security incident", suspected to possibly involve one of its employees.

Catalyx did not disclose the amount of crypto lost due to this incident.

Bitstamp Follows Binance and Bybit in Exiting Canadian Market

Earlier, Finance Magnates reported that Bitstamp decided to cease its operations in Canada from January 8, 2024, following the exits of Binance and Bybit earlier in the year. The CEO of Bitstamp, Bobby Zagotta, expressed his gratitude to Canadian customers, attributing the move to new regulatory dynamics. Customers can withdraw funds until January 8, after which account deactivation is required.

The departure is aligned with a broader trend as major exchanges like Binance and Bybit have left due to regulatory changes and market conditions. The Canadian Securities Administrators allowed specific stablecoin trading under certain conditions, signaling evolving regulatory landscapes. Bitstamp's exit underscores challenges in the crypto industry amid shifting compliance demands.