Platform Operations and Relationship Disclosure:
The below is important information with respect to the operations of the CatalX CTS Ltd. (“Catalyx”) crypto-asset trading platform (the “Platform”).
Catalyx is a registered money service business under the Proceed of Crime (Money Laundering) and Terrorist Financing Act (Canada).
Catalyx has submitted an application for registration as a restricted dealer in each Province in Canada as well as an application for relief under securities legislation, but there is no guarantee the application will be granted. Catalyx is not currently registered under the securities or derivatives legislation of any jurisdiction of Canada and has not been granted an exemption from any requirements of securities or derivatives legislation of any jurisdiction in Canada.
Until such time as Catalyx obtains registration, Catalyx has agreed to abide by the terms of an undertaking filed with the Alberta Securities Commission, available at the following link.
Our fee schedule located at this link. Note that fees are subject to change at the discretion of Catalyx. When you place an order through the Platform you will be notified of the fees associated with your order prior to submitting it.
How orders are entered, interact and execute
The Platform provides users with information on the available quantity and price of each crypto asset offered for trading on the Platform based on the prices and liquidity available from our liquidity providers. You may enter either ‘market’ or ‘limit’ orders through the Platform.
Market Orders are executed by the Platform on an immediate basis based on the best price available to Catalyx from our liquidity providers. If you enter a ‘market’ order you are requesting to purchase (or sell) the crypto asset in question at the current ‘market’ price displayed to you on the Platform. When you execute a market order Catalyx will purchase (or sell) the quantity of crypto assets set out in your order at the best price available from our liquidity providers and credit (or debit) the crypto assets you have purchased (or sold) to your account on the Platform.
Limit Orders are added as open orders of Catalyx with our liquidity providers on your behalf and are executed once the requested price becomes available from a liquidity provider based on prevailing market prices. The Platform allows for partial fulfillment of Limit Orders based on available liquidity.
Market orders cannot be cancelled by users. Limit Orders can be cancelled by users until they are executed by the Platform.
Every trade you execute on the Platform is a contract between you and Catalyx. When Catalyx executes a trade on your behalf Catalyx acts as counterparty in the trade with you and executes a corresponding trade in the opposite position with one of its liquidity providers.
Types of Crypto Assets Available on the Platform
There is a wide variety of crypto assets presently available on the platform, a full list of which can be found at this link.
Catalyx has established policies and procedures to review each crypto asset offered for trading on the Platform. Among other information, we review available public information relating to the crypto asset on the following topics prior to making a determination on whether a crypto asset will be listed:
The history and characteristics of the crypto asset including whether the crypto asset was launched by ICO;
Analysis of the founders or inventors of the crypto asset/related network and a review of their ongoing involvement with crypto asset/network;
How the crypto asset functions including a review of its utility or purpose;
The market liquidity for the crypto asset;
The current and proposed governance of the ecosystem on which crypto asset operates with a focus on the level of decentralization of such ecosystem; and
The position taken by regulators with respect to the crypto asset including any
enforcement action taken against the crypto asset, the related network, or the founders.
In addition to the above we also conduct an analysis of factors weighing in favor or against the crypto asset being deemed to be a security based on Canadian securities laws.
Catalyx may, based on (i) material developments or changes in the risk profile of a crypto asset (including any action taken by a regulatory body with respect to a crypto project or due to regulatory changes) or (ii) business reasons choose to delist certain crypto assets from the Platform from time to time. For more information on our procedures with respect to the delisting of crypto assets please see our Terms of Service.
A general discussion of some of the risks associated with trading crypto assets can be found here. Crypto Asset Statements containing a plain language description of the crypto assets offered on our Platform and some of the associated risks can be found here.
The Platform is open to all members of the public. Users are required to provide a valid email address and cell phone number to create an account. Users are required to verify their identity before they will be allowed to trade on the Platform.
All users are also required to provide information about their prior investment experience, risk tolerance, and financial situation in an account appropriateness assessment. The purpose of the assessment is to evaluate if trading in crypto assets is appropriate for a user and to determine if a user has an understanding of the risks associated with trading crypto assets. Based on the provided responses, users will either be granted access to the Platform, possibly with specific trading limits (detailed below) or, if the answers suggest that their risk tolerance, financial situation or knowledge isn’t appropriate for investing in crypto, the user will be restricted from opening an account.
Provincial securities regulators in each province of Canada (other than British Columbia, Manitoba and Quebec) have established limits on the maximum net investments in crypto assets (other than certain specified crypto assets noted below) that most users can make on the Catalyx Platform on a rolling 12-month basis. Users that are residents in Alberta, Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia or Prince Edward Island, who are not permitted clients, are subject to a net purchase limit of $30,000 on a rolling 12-month basis (the “Trading Limit”).
No limits apply to purchases of Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), or Litecoin (LTC). When a user buys any crypto asset other than BTC, ETH, BCH, or LTC (a “Restricted Token”) they use some of their limit. Selling Restricted Tokens will add space back to their limit (to a maximum of $30,000).
Your Trading Limit is determined when you create an Account and complete the account appropriateness assessment. The Trading Limit, if applicable, is then applied automatically by Catalyx to limit the net amount of Restricted Tokens that you can purchase in your Account on a rolling 12 month basis. For the purpose of ensuring that the Trading Limits are applied to all users, users are not permitted to open more than one Account on the Services at any time.
The Trading Limits do not currently apply to users resident in British Columbia, Manitoba or Quebec.
The hours of operation of the Platform, System Maintenance
The Platform operates on a 24/7 basis except when temporary shutdowns are required for maintenance.
From time to time the Platform may be required to be shut down temporarily for maintenance. If the maintenance is scheduled we will provide users advance notice of the shutdown to enable users to plan for such disruption. Occasionally the Platform may be required to be shut down for unexpected maintenance; if this occurs we will provide notice to users of such shutdown as soon as is practical. During the period of any Platform shutdown users will not be able to trade or transfer crypto assets. By using the Platform you acknowledge that Catalyx will not be liable to you for any losses that you may suffer due to Platform shutdowns or your inability to trade or transfer your crypto assets during such shutdowns. By using the Platform you explicitly accept the risks associated with trading crypto assets on a digital platform, including the risk that the Platform will not be operational 100% of the time.
Users will get a daily report of their activity on the platform in terms of deposits, withdrawals and trades.
Who holds your Crypto Assets
If you purchase crypto assets on the Platform you are able to transfer them into your own private wallet. If you chose to store your crypto assets on the Platform they are held by Catalyx in trust for you with our designated custodian Bittrex Global GmbH (the “Custodian”). The Custodian is a Liechtenstein-based corporation licensed under the Token and Trusted Technology Service Provider Act as a Token Depository in Liechtenstein and regulated by the Liechtenstein Financial Market Authority. Crypto assets held on the platform are held by the Custodian in an omnibus wallet in the name of Catalyx, together with the assets belonging to other Platform users, but separate and apart from any assets belonging to Catalyx or the Custodian.
Storing your crypto assets on the Platform with the Custodian may increase certain risks vs you holding your crypto assets your own private wallet. For more information on custodial risks please review the Risk Statement.
Who holds your Fiat Assets (Cash)
Cash deposits you send to the Catalyx platform are held in a Canadian bank account in the name of Catalyx or an affiliate of Catalyx separate and apart from the assets of Catayx in trust for you. When you make an order to purchase crypto assets for cash you authorize us to use the required amount of cash that we hold for you to satisfy your order. No interest will be paid to you for any cash balance that you maintain in your account on the Platform.
As of June 22, 2023 all cash held by Catalyx on the Catalyx platform for our users will be held in a designated trust account with Servus Credit Union in accordance with applicable securities law requirements.
Servus is based in Alberta, Canada. It is presently the largest credit union in Alberta with over 100 branches and 380,000 member-owners, including over 40,000 business members.
Conflicts of Interest
Catalyx has in place policies and procedures to identify and manage any conflicts of interest that may arise.
Information on certain potential conflicts of interest are discussed below.
As discussed above every trade you execute through the Platform is a contract with Catalyx. When you place an order to purchase a crypto asset through the Platform, Catalyx places a matching order through one of our liquidity providers in order to fill your order. Catalyx trades as riskless principal in each trade and does not profit from your trades other than by the fees we charge which are disclosed to you prior to you executing a trade.
Catalyx charges fees on a percentage basis for trades in crypto assets on the Platform as well as for withdrawals of fiat currency from the Platform. Fees associated with withdrawing crypto assets from the Platform are based on the specific crypto asset in question and are charged by the Custodian, not Catalyx. Catalyx fees are available here.
You are also informed of and must consent to the relevant fees that will be charged to you before you made a trade or complete a transaction on the Platform.
We have policies and procedures to ensure referral arrangements including the terms of such arrangements are disclosed and operated in accordance with applicable laws.
Business Operations between Catalyx and Bittrex:
Catalyx presently utilizes a single liquidity provider, Bittrex DLT, for the purpose of operating the Platform. Catalyx and Bittrex also co-operated in the transition of users from Bittrex’s platform to Catalyx’s platform, and as a result enjoy a closer corporate relationship than is typical. While Catalyx intends to include additional liquidity providers in the future, the use of a single liquidity provider in light of the aforementioned cooperation creates potential conflicts of interest between Catalyx and Bittrex DLT.
A conflict of interest may arise if Catalyx personnel hold accounts with or are otherwise in a position to influence Bittrex DLT in such a way that is inconsistent with the best interests of Catalyx’s users. Further, a conflict of interest may arise if Catalyx personnel with trading accounts holding crypto assets available on the Bittrex platform received a special offer or other beneficial arrangement not otherwise available to the public due to its relationship with Bittrex. Last, a conflict of interest may arise if Catalyx personnel obtain inside information on the future listing of crypto assets on Bittrex and utilize that information in a manner inconsistent with the best interests of Catalyx’s users.
To address these, and other, potential conflicts of interest, Catalyx has implemented a Personal Trading Policy including controls designed to prohibit, among others, the aforementioned activities.
You acknowledge that Catalyx will not provide any advice to you and will not be responsible for making a suitability determination when accepting orders to buy or sell crypto assets. You alone are responsible for your own investment decisions and we will not consider your financial situation, investment knowledge, investment objectives, savings objectives or risk tolerance when accepting orders from you. Catalyx does not provide financial, legal, tax or investment advice or recommendations.
When a client submits a written complaint we will send an acknowledgement in writing within 48 hours of receiving it. Except for complaints regarding Platform operations or technical issues which may be addressed sooner or later depending on the nature of the complaint, written complaints are reviewed and investigated within 30 days of receiving the complaint. The findings of the investigation will be reported to the complainant in writing.
Catalyx will maintain a file and orderly record of complaints and follow‑up documentation for compliance reviews, including:
date the complaint was received;
nature of the complaint;
date of acknowledgement of written client complaint;
current status of the client complaint; and
date that the client was informed of the results of the Company’s internal investigation.
 Permitted client has the meaning set out in National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations and includes very high net worth persons and institutional investors.