Companies Editor's Picks News

Catalyx Halts All Operations Due to a Security Flaw

catalyx hack

The Canadian cryptocurrency exchange Catalyx was impacted by a security breach, leading to the temporary suspension of withdrawal and trading operations on the platform. The company, operated by CatalX CTS Ltd., reported the situation in a press release, stating that the decision to halt trading and withdrawal activities was made after the discovery of a potential security incident involving an employee.

While the exact amount of Catalyx assets lost during the breach was not disclosed, the severity of the incident prompted the Alberta Securities Commission to issue a cease-trade order on December 21 against the company and its co-founder, Jae Ho Lee. The commission initiated an investigation suspecting that the loss of part of Catalyx’s customer assets was linked to the involvement of an employee in the security incident.

catalyx hack

Catalyx Will Not Operate Until January 5 and is Awaiting the Results from Deloitte

The 15-day freezing order, accepted by CEO Jae Ho Lee, will expire on January 5. The suspension of operations on the platform has affected both cryptocurrency and fiat currency withdrawals and trading activities. On Catalyx’s official page, a notice has been posted informing users of “technical difficulties” and promising to notify customers when regular services are restored.

As part of the response to the security breach, Catalyx has hired the financial auditing firm Deloitte LLP to conduct forensic and investigative services. The company expects to provide updates to its users after Deloitte concludes its investigation.

Founded by Jae Ho Lee in 2018 and registered with Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC), Catalyx experienced an increase in trading volume in May 2021, reaching $28 million, representing a 73% month-over-month increase. However, this recent security incident has raised concerns about the safety of assets on the platform. Once the investigations into the breach are concluded, the real impact on Catalyx and its users will become clearer.

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