The Canadian Investment Regulatory Organization (CIRO) published a Digital Asset Custody Framework that sets expectations for how Dealer Members operating crypto-asset trading platforms (CTPs) in Canada must custody digital assets. The framework strengthens requirements for holding client assets, including where third-party custodians are used, and will be implemented through terms and conditions of membership. The guidance targets technological, operational and legal risks specific to digital assets, covering crypto assets and tokenized assets including stablecoins. It introduces a tiered, risk-based structure intended to allow firms to diversify custody arrangements while maintaining investor protection safeguards, and builds on existing custody and segregation requirements, reflecting lessons from past crypto-sector failures such as hacking, fraud, inadequate governance and insolvency. The guidance note is effective immediately.

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