The Canadian Investment Regulatory Organization (CIRO) has issued new digital asset custody standards for crypto trading platforms in Canada on February 3, 2026, aiming to address various associated risks.
The new framework highlights the critical nature of secure crypto asset custody, impacting dealer members’ operations and the broader crypto ecosystem’s regulatory landscape, fostering a more resilient market environment.
CIRO Unveils Standards for Digital Asset Custody
The Canadian Investment Regulatory Organization (CIRO) introduced new standards for digital asset custody. The framework addresses technological, operational, and legal risks. This guidance provides tiered custody requirements for dealer members on crypto trading platforms.
CIRO, a self-regulatory body, oversees investment dealers, ensuring they follow the new digital asset security protocols. Alexandra Williams, a senior figure at CIRO, emphasized the importance of responsible operating and innovation within these new frameworks.
New Framework’s Immediate Impact on Crypto Dealers
CIRO’s framework affects all crypto assets held by dealer members, excluding tokenized financial assets. The rules allow dealers to self-custody a portion of client assets under strict controls. Compliance includes asset monitoring, insurance, and penetration testing.
The new custody framework is expected to enhance security and minimize risks in crypto markets. By introducing tiered custody standards, the CIRO aims to promote safety while enabling innovation within the industry. The regulation’s long-term effects will depend on market adaptation.
Lessons from Past Failures in Digital Asset Security
Past vulnerabilities in the sector include hacking, fraud, and insolvency. CIRO cites these failures as reasons for new custody standards. The recent seizure of $56M in crypto highlighted significant risk management challenges.
Analysts from Kanalcoin suggest the guidance could influence best practices globally, as it balances risk management with operational freedom. The focus on tiered custody provides flexibility while maintaining rigorous security standards based on historical trends.
Alexandra Williams, Senior Vice-President of Strategy, Innovation and Stakeholder Protection, CIRO, “Custody is one of the most critical points of risk in the crypto ecosystem. This new framework gives firms the flexibility to operate and innovate responsibly.” – Source
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