The Canadian Investment Regulatory Organization has introduced new crypto custody standards aimed at strengthening investor protection and reducing risk across the digital asset market. The new Digital Asset Custody Framework took effect immediately and applies to CIRO Dealer Members that operate crypto-asset trading platforms in Canada.
The announcement marks a major step in Canada’s broader effort to bring clarity and discipline to the fast-growing crypto sector. Regulators say the rules respond to past failures while supporting responsible innovation.
What the New Crypto Custody Framework Covers
The framework sets clear expectations for how trading platforms must safeguard client assets such as cryptocurrencies, stablecoins, and tokenized assets. It focuses on custody practices that reduce operational and cyber risks. Furthermore, it outlines how platforms should manage assets when they rely on third-party custodians.
Key areas addressed in the framework include:
- Secure storage standards for digital assets
- Strong governance and internal controls
- Clear segregation of client assets from company funds
- Ongoing audits and risk monitoring
- Higher oversight of third-party custodians, including those based outside Canada
CIRO worked with industry stakeholders while shaping the rules. It also reviewed global regulatory trends and lessons from past crypto collapses.
Why Investor Protection Is the Main Goal
CIRO says investor assets face serious risks without proper safeguards. Hacks, poor controls, and weak governance have harmed investors before. Therefore, the regulator aims to prevent similar outcomes in Canada.
The collapse of QuadrigaCX still looms large in the country’s regulatory memory. That case highlighted how poor custody practices can leave investors exposed. The new standards seek to close those gaps and improve accountability across platforms.
What This Means for Canada’s Crypto Market
Industry analysts believe the framework could boost confidence among retail and institutional investors. Some Canadian platforms previously depended on foreign custodians due to limited domestic options. Now, clearer rules may encourage stronger local infrastructure.
Looking ahead, experts expect more regulatory steps. These may include expanded reporting requirements and possible federal rules for stablecoins and tax transparency. As a result, crypto platforms in Canada will likely continue adjusting their systems to meet higher compliance expectations.
