Canada-based Coinsquare Suffers Data Compromise; Announces Temporary Shutdown
Just a couple of weeks after Coinsquare was approved as the first Canadian crypto exchange by the Investment Industry Regulatory Organization of Canada (IIRO), the trading platform witnessed a data breach that exposed the personal details of some of its users.
Hence, the Canadian digital asset trading firm announced that it had temporarily suspended operations to allow for an investigation into the unusual activities. Nevertheless, some active measures have allowed the company to resume operations gradually.
However, the company sent an email to investors explaining that the attack exposed its customer database containing their details. As a result, Coinsquare admitted that a third party may have accessed that information.
The compromised database includes users’ personal information like names, residential addresses, email addresses, dates of birth, account numbers, balances, and others.
The statement from the firm read, “Coinsquare always notes that customers’ assets have been and will remain secure in the company’s cold storage and are not exposed to risks.”
However, although Coinsquare did not detect any activity from attackers using the breached data, the exchange’s official statement is to warn users to be aware of the incident, change their passwords, and use two-factor authentication (2FA).
Becoming IIROC’s First Registered Member
Coinsquare became the first registered crypto exchange with IIROC last month after the regulatory body approved its membership application. The approval means that the exchange is obligated to separate and keep client funds in the custody of licensed and insured fund managers.
Furthermore, as an approved service provider, Coinsquare must regularly report its financial status and maintain liquidity. In addition, the Canadian Investment Protection Fund will insure all cash held in customers’ accounts in the event of insolvency.
The exchange has over 500,000 users and offers access to over 40 crypto asset classes. So far, Coinshare has facilitated around $5.82 billion worth of transactions since it commenced operation in 2014.
The crypto regulatory approach of Canada differs from that of the United States. In Canada, for instance, all digital asset service providers operating in the country must apply and be registered with the IIROC.
But like other countries, Canadian regulators are also strict with enforcing rules, especially after the collapse of the Terra LUNA ecosystem. In June 2022, Ontario regulators banned KuCoin from operating within their jurisdiction after alleging that the exchange failed to respond to the agency’s information requests.
Canada has had several challenges regarding compliance with crypto exchanges, as each province has its regulatory guidelines and requirements.
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