Purpose: This report summarizes a regulatory development and why it matters. It is informational and not legal or investment advice.
\n
| What happened |
Canada’s investment industry self-regulatory organization, the Canadian Investment Regulatory Organization (CIRO), published a Digital Asset Custody Framework that applies to dealer members operating crypto-asset trading platforms in Canada. |
|---|---|
| Why it matters |
Custody is one of the highest-risk points in crypto. When assets are held with weak controls, failures can cascade into losses for customers and long legal recovery processes. New custody expectations are also a signal: regulators increasingly treat custody, governance, and operational resilience as core investor-protection issues, not optional features. |
| Primary source |
|
| Additional reporting |
|
Context: why custody standards keep tightening
CoinDesk linked the new framework to the history of major custody failures, including the collapse of QuadrigaCX. The broader pattern is consistent across jurisdictions: regulators look for repeatable controls around where assets are held, how they are segregated, and how platforms handle incidents.
What platform operators should expect (high level)
- More scrutiny on custody arrangements and custodial counterparties
- Clearer expectations on governance, risk oversight, and incident response
- Pressure to document custody flows, segregation, and customer asset protections
What users can do
If you use a platform, ask practical questions that map to custody risk:
- Where are assets custodied (and by whom)?
- Are customer assets segregated from corporate assets?
- How are withdrawals and key controls governed?
- What happens during an incident (pause, disclosure, recovery steps)?
What to watch next
- Whether CIRO publishes follow-up guidance or implementation details
- How Canadian platforms disclose custody structures to users
- Whether other jurisdictions reference similar custody control models
Next
About the Author
