CatalX and CEO settle with ASC for breaches of undertaking obligations

CALGARY, AB, July 30, 2026 /CNW/ -- The Alberta Securities Commission (ASC) has concluded a Settlement Agreement and Undertaking with CatalX CTS Ltd. (operating as Catalyx) and its chief executive officer, Hyuk Jae Park (Park), for breaching Alberta securities laws. 

Catalyx operated a crypto asset trading platform in Canada from February 2019 to January 2024. In January 2024, Catalyx entered receivership with a court-appointed receiver.

In February 2023, the Canadian Securities Administrators (CSA) issued a notice advising that all crypto asset trading platforms were required to file a pre-registration undertaking with the relevant CSA jurisdiction to permit them to continue operating in Canada while they sought registration and related exemptive relief with their respective securities regulator.

In March 2023, Catalyx entered into a pre-registration undertaking with the ASC in which it made important legal commitments. Catalyx undertook to establish and maintain procedures to mitigate custodial risks to clients' assets and to promptly report any material breach to the ASC. 

Catalyx breached the terms of that undertaking in two critical ways. First, it failed to ensure that proper controls existed to prevent unauthorized withdrawals and safeguard clients' assets. The receiver found that Catalyx's records showed almost $14 million USD in crypto assets, but the actual value was only about $150,000 USD. The primary cause of this shortfall was unauthorized withdrawals and the use of crypto assets for purposes unrelated to client activities.

Second, although Park became aware of this loss of clients' assets by November 24, 2023, Catalyx did not inform the ASC of this material breach until December 21, 2023. This delay in reporting was a breach of Catalyx's undertaking.

In the Settlement Agreement and Undertaking, Catalyx admitted that it breached Alberta securities laws by failing to comply with the terms of its undertaking. Park admitted that, as chief executive officer and signatory to the undertaking, he authorized, permitted or acquiesced in those breaches.

"Commitments made to securities regulators are not optional.  Pre-registration undertakings are significant legal obligations that crypto asset trading platforms must comply with to operate in Canada," said Cynthia Campbell, Director of Enforcement.  "The safeguarding of client assets and timely reporting of material breaches are core investor protection requirements. When those obligations are not met, the ASC will take enforcement action. This settlement demonstrates our commitment to protecting investors and maintaining confidence in Alberta's capital markets."

As part of the Settlement Agreement and Undertaking:

• All trading in Catalyx securities must cease and Catalyx is permanently prohibited from trading or purchasing securities or derivatives, relying on exemptions, acting as a registrant, investment fund manager or promoter, engaging in investor relations activities, or participating in the capital markets in a management or consultative capacity.
• Park agreed to pay $90,000 to the ASC, resign all director and officer positions, and be prohibited from acting as a director or officer (subject to a limited exception), engaging in investor relations activities, becoming or acting as a registrant, investment fund manager or promoter, or participating in the capital markets in a management or consultative capacity. The prohibitions will continue in effect for six years or until Park completes training on the duties of corporate officers, whichever is longer.
• The monetary settlement and market access restrictions would have been higher absent Park's funding and contributions of $950,000 to Catalyx's receivership process.

The ASC continues its proceeding against Jae Ho Lee, the former chief financial officer of Catalyx, for alleged fraud.

The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.

SOURCE Alberta Securities Commission

For further information, please contact: For Media inquiries: Tanja McMorris, Senior Advisor, Communications, [email protected]; For Investor inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488, [email protected]