An Alberta-based cryptocurrency trader has been ordered to halt operations after falling victim to a security breach.
The Alberta Securities Commission (ASC) imposed the cease and desist order on CatalX CTS Inc. late last month after the cryptocurrency trading platform was hacked and customer assets stolen.
According to the ASC interim cease trade order, company staff sought an “urgent” hearing with commission officials on Dec. 21 which led to the order being granted.
“Given the exigent circumstances … staff’s request to waive or vary the commission’s ordinary procedures to apply for an interim order by notice of hearing was granted by the panel,” states the order also dated Dec. 21.
“The commission notes that counsel for the respondent CatalX, has consented to the order sought by staff.”
That 15-day halt to trading or purchasing securities or derivatives could have expired Friday but was extended for a further 12 months, with the ASC also commencing an investigation into the security breach.
A week later, the company publicly announced the breach, which they suspect was an inside job.
“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,” CatalX said in a statement.
“The company is currently conducting an investigation into the loss and has retained Deloitte LLP to provide certain forensic and investigative services to the company in connection with its investigation.”
The scale of the loss wasn’t disclosed by the ASC or CatalX and company officials couldn’t be reached for comment Friday.
It comes just weeks after cryptocurrency mogul Sam Bankman-Fried in November of last year was found guilty in a U.S. court of seven fraud counts for ripping off customers in the collapse of cryptocurrency exchange FTX.
As part of its ongoing investigation, the ASC is hoping to speak with CatalX customers who are urged to go to the investor questionnaire at www.asc.ca
BKaufmann@postmedia.com
X: @BillKaufmannjrn