Canada’s Biggest Bitcoin Exchange Closing

Some of bitcoin’s biggest news surrounds the announced closure of Canada’s biggest bitcoin exchange, CAVIRTEX.  Their main reason for closing is a security issue; their database, holding 2FA secrets and hashed passwords was hacked, although no identity information was stolen.  They’ve had issues with security in the past and are closing before a more serious breach and important information or bitcoin itself is stolen.  They have set a March 25 closure deadline and the company assures customers that no funds were compromised and that they are able to cover all withdrawals until that time. This is what the vice president of CAVIRTEX told CoinDesk:

“[The closure] has entirely to do with the fact that some of our databases were compromised. And, given the history of hackers against us, you know, it seems to be kind of never ending. We never lost any client funds but its getting to the point where it could happen.”

Another factor playing a role in this may be that CAVIRTEX has been having trouble with banking partners, specifically one that remains unnamed.  Due to the instability of bitcoin and the risks involved, banks are reluctant to conduct business and partnership with these types of companies.

This the statement from CAVIRTEX concerning the back issue:

“Due to the regulatory uncertainty towards bitcoin, attaining banking services is a huge challenge. Given our line of business, the risk profile of a bitcoin exchange is considered high. In speaking with banks, what is truly desired is some clarification from the government and regulators on bitcoin’s legality, taxability, and usability. This would go a long way in helping bitcoin companies get banking solutions.”

This is the second Canadian exchange to close this year.  Some say this gives opportunity to the exchanges that remain or even for a new exchange to open.

 

 

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