CatalX: the claims came after the vote, and the dividend was 0.30%

CatalX CTS Ltd. ran a crypto trading platform under the name Catalyx from a registered office in Calgary. Bittrex Global GmbH, which with an affiliate was also a major shareholder, supplied "substantially all of the technology and liquidity" the platform needed and held its customers' crypto as custodian. On November 20, 2023, "without notice to the Companies," Bittrex announced it would end all trading on December 4, and CatalX concluded it could not carry on without it, according to the first affidavit of CatalX's chief executive, Jan. 10, 2024, paras. 3–5, 12–15. On or around November 24, CatalX stopped allowing customers to withdraw their deposits "due to liquidity constraints," per the Proposed Receiver's Report, Jan. 17, 2024, para. 16(a).

Much of what the chief executive learned over the next four weeks, he swore, came from staff. The chief financial officer, also a director, was to his understanding the only person who could transact in the Bittrex wallets holding the company's crypto and its customers'. CatalX Management Ltd., the British Columbia sister company that employed the staff, had not paid them for November. His request for the wallet logins in mid-December went unanswered, and on December 19 the company's counsel wrote that, from what staff could see, the balances of customer funds "had been withdrawn or transferred out of the accounts." The chief financial officer resigned on December 22, per the same affidavit, paras. 6–9, 19–23.

The Alberta Securities Commission, told by CatalX's counsel on December 21, issued an interim cease trade order that evening; that day the chief financial officer's counsel wrote that he was not the only person with access and that about US$69,000 of digital assets remained at Bittrex. When the Commission heard an application to extend the order on January 5, 2024, the panel later wrote, "there was no explanation for the apparent disappearance of more than $12,800,000 from Catalyx's trading account." Its reasons of February 9 found, on a prima facie basis, that CatalX had breached s. 93.2 of the Securities Act by failing to honour its pre-registration undertaking to report any loss of client crypto promptly and to control custodial risk, and that the former chief financial officer had authorized, permitted or acquiesced in those breaches. "In our view, notice given a full week after knowledge of a loss of crypto assets was not prompt," the panel wrote, extending the order for 12 months; such interim orders, it noted, "are not sanctions," per Re CatalX CTS Ltd., 2024 ABASC 23, Feb. 9, 2024, paras. 10, 13–14, 23, 26, 34, 38, 44.

CatalX and its chief executive applied for a receiver together. On December 24, 2023 he had lent the company $800,000, secured on all its personal property, to pay its counsel and Deloitte's forensic work, and he swore he was its only secured creditor, per the first affidavit of the chief executive, paras. 33–34, 37(f). On January 19, 2024, Justice R.A. Neufeld appointed Deloitte Restructuring Inc. receiver-manager of CatalX under the Judicature Act and Alberta's Business Corporations Act, and of CatalX Management under British Columbia's Law and Equity Act, with power to investigate crypto "whether now or previously in the possession of the Companies" and to run a claims process, per the Receivership Order, Jan. 19, 2024, paras. 2, 3(i), 3(q).

What the receiver found in the wallet

CatalX's records showed customer assets in about 590 cryptocurrencies worth approximately US$13,958,536 on the day of the receivership, the receiver reported in May 2024. What it actually held was worth approximately US$151,070, a shortfall of approximately US$13,807,467; the receiver counted 9,902 customers with potential claims. Deloitte's preliminary findings placed the primary cause in "the use of customer assets for purposes unrelated to customer activities": unauthorized withdrawals to outside wallets and exchange accounts, beginning no later than May 2021, used for operating expenses, for trading "and potentially for personal use." The report says the former chief financial officer "played a primary role in executing the Unauthorized Withdrawals and creating the Shortfall," and that Deloitte could not rule out others' involvement but had found no information suggesting it; the findings are "preliminary in nature and subject to an ongoing investigation," per the First Report of the Receiver, May 21, 2024, paras. 44, 52–55, 66.

On the receiver's account, deposited crypto "effectively became part of a collective Crypto pool," and a withdrawal from the wallet did not change the balance a customer saw on screen. A customer who tried to withdraw more than the wallet held met "technical error messages," and "some customer trade and withdrawal requests were fulfilled using Crypto previously diverted from other customers." In August 2022 Bittrex had taken equity in CatalX in exchange for its Canadian customer base, bringing about 8,100 customers and approximately US$15,258,712 of crypto onto the platform, which the receiver calls "a new source" for the withdrawals, per the First Report, May 21, 2024, paras. 57–59, 63.

The chief executive's guarantor deposits, $750,000 in all, paid for the receivership and the investigation, per the First Report, May 21, 2024, para. 79. The forensic work later stopped at the receiver's request. The crypto still at Bittrex sold for approximately $179,000 in March 2025, and after the Commission varied its order, the former chief financial officer paid about $23,000 into the receiver's trust account. After a holdback, an estimated $96,464 was left, per the Second and Final Report of the Receiver, June 6, 2025, paras. 23(e)–(f), 26–30, 43.

A $210,000 proposal, with releases

CatalX filed a Division I proposal on May 14, 2025, with Deloitte as proposal trustee. The cash pool had three sources: $210,000 from the chief executive, as sponsor, and other current and former directors, with the former chief financial officer expressly excluded; the receivership's remainder; and anything recovered within six months of implementation from investigations into the company and its former chief financial officer. The sponsor, the only secured creditor, could not vote and took no distribution. In a bankruptcy, the trustee reported, the $210,000 would not come in and his secured claim, if valid, would take the $38,552 otherwise available, leaving unsecured creditors nothing; the proposal's estimate for them was $111,520. Releases for the company and the participating directors, reaching "any and all Claims or contingent Claims of any securities commission," were a condition of the proposal, with carve-outs for claims under s. 50(14) of the BIA, per the Proposal Trustee's Report to Creditors, May 14, 2025, pp. 2–5.

At the June 2, 2025 meeting, creditors "expressed scepticism that the Proposal, if approved, may absolve the directors of any liability in exchange for a small recovery of funds." The trustee said there had been no indication the sponsor or participating directors were involved, though "a full investigation into the Proposal Sponsor and Participating Directors has not been conducted." In the revised tally, 104 claims worth $3,277,160 had been filed in time to vote; 79 claims worth $2,221,798 voted for and 16 worth $850,949 against, per the minutes appended to the Proposal Trustee's Second Report, Apr. 16, 2026, App. B, paras. 29, 37, 83.

On June 20, 2025, Justice Neufeld found the proposal "made in good faith" and approved it. His order keeps the s. 50(14) exception in the director release and adds another: nothing in it releases a director "from fraudulent or criminal conduct," per the Order (Approval of Proposal), June 20, 2025, paras. 3, 12. The same day he approved the receiver's accounts and its discharge on the filing of a certificate, per the Discharge Order, June 20, 2025, paras. 2–4, 9.