The first Canadian bitcoin exchange, CAVIRTEX, has announced that it will be shutting down operations in March. This news comes after an internal investigation revealed a compromise of sensitive security information, including passwords and two-factor authentication information. The official report can be seen on their news page as well as this pastebin.
All exchanges have a bond with their users that is based on trust. Due to the compromised information, CAVIRTEX cites that the damage dealt to the exchange’s reputation is more than enough to cease operations. The post went on to say that CAVIRTEX remains solvent and that client funds were unaffected during the incident. Despite the imminent shutdown, customers will be fully paid back any funds they have deposited into the exchange.
Kyle Kemper, VP Business Development at CAVIRTEX, has asked that customers to change their account information on the website. This includes changing passwords, as well as updating withdrawal balances. The closure announcement also advised users to clear all site cookies as well. Bitcoin and other market trading activities on the exchange will cease on 20th March, and balance withdrawals will proceed until 25th March.
The exchange was one of the top places to buy and sell bitcoin in Canada and the closure will leave the field in Canada open to new businesses focused in this area. Previously this month, the Canadian bitcoin exchange Vault of Satoshi, announced its closure in early January. Vault of Satoshi’s closure was due to a directional change from their parent company, which deemed the service no longer worth continued development.
Banking Problems Highlighted
CAVIRTEX mentioned that there were other factors behind the closure including problems with its banking partner. The company did not name the bank in question, but it said that the costs of providing the service proved difficult in the long-term and could not be made sustainable.
When the exchange held a virtual IPO in 2013, Kyle Kemper said that the company will be operating with shareholders in mind, responding to shareholders who asked what was to become of their investment. However, it is suspected that the value of those shares could be impacted as the exchange closes its doors.
The Canadian bitcoin market has lost its largest exchange. and while there are some other exchanges continuing operations in the Great White North, this recent closure shows that there is always room for improvement.