As stated by the Wall Street Journal (WSJ) in the article provided below, a significant market disruption occurred last week due to the cryptocurrency exchange FTX Trading Ltd. filing for bankruptcy and its crypto asset FTT losing its value. The company’s fallout took place because the exchange lent billions of dollars worth of its customers assets to fund risky bets by its affiliate trading firm, Alameda Research, in order to generate wealth for the company, and not its customers. The investments made by FTX were not only unethical but also incurred significant losses and leading to their incapacity to recover its customers assets. Hence, on November 11, FTX filed for bankruptcy in the U.S., negatively impacting approximately 130 additional affiliated companies.
“Catalyx is committed to being transparent and compliant within the cryptocurrency industry in Canada. Catalyx has never, and will never, expose its customers nor its investors to the FTT token, FTX, nor Alameda Research. Furthermore, we would like to state that Catalyx has not, does not, and will not ever lend, trade or invest its clients assets by any means. We would also like to emphasize and remind our customers and investors that Catalyx operates in complete compliance with the Canadian regulations, as a licensed Money Services Business with FINTRAC. These measures are taken to ensure all our customers’ and investors’ virtual currencies and funds are being monitored and are safe from any suspicious activity. Our customers’ assets, fiat and crypto funds, are 100% protected and held with a licensed and trustworthy third-party custodians in a secure and insured environment.
On behalf of Catalyx, we would like to reassure our customers and our investors that your funds are secure and protected with us, and that we will never use them to trade and generate wealth for the company. Our trading operations, deposits, and withdrawals have and will continue seamlessly.”
– Jae Ho Lee, Co-Founder and CFO of Catalyx.
Source: FTX tapped into customer accounts to fund risky bets, setting up its downfall. The Wall Street Journal. Retrieved November 14, 2022, https://www.wsj.com/articles/ftx-tapped-into-customer-accounts-to-fund-risky-bets-setting-up-its-downfall-11668093732