The Alberta Securities Commission (ASC) has extended a cease trade order it filed against Catalyx by 12 months following a security breach that led to a loss of crypto assets. 

The allegations have not yet been proven in a hearing, the ASC said. 

Initially filed on an interim basis on December 21, 2023, the extended order prohibits the unregistered cryptocurrency trading platform and its co-founder and CFO, Jae Ho Lee, from trading or purchasing any securities and derivatives until January 2025. 

On December 28, one week after the ASC’s initial cease trade order against the company, Catalyx announced it had temporarily suspended all crypto and fiat currency withdrawals after recently discovering a security breach on its platform. Catalyx said the interim cease trade order against it and Lee was in connection with the breach. 

“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,” the Calgary-based company said in a statement. 

The ASC said it is currently investigating whether Catalyx breached its undertakings in its pre-registration undertaking, in respect to business operations and client accounts. The ASC is also investigating whether the platform and Lee otherwise breached Alberta securities laws.

The allegations have not yet been proven in a hearing, the ASC said. 

Catalyx said it is conducting its own investigation into the breach and subsequent losses, retaining the services of Deloitte to “provide certain forensic and investigative services” to the company for its investigation.

BetaKit has reached out to Catalyx CEO and director Jae Park for comment.

The ASC says Catalyx clients can help with its investigation by filling out the questionnaire on its website. 

Feature image by Alesia Kozik via Pexels.

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