Crypto: Canada’s Ciro Formalizes Interim Crypto Custody Framework 2026

The Canadian self-regulatory organization outlined custody limits, capital thresholds and reporting rules while long-term regulation remains in progress.

The Canadian Investment Regulatory Organization (CIRO) has formalized its interim framework governing the custody of crypto and tokenized assets.

The move outlined how dealer members are expected to safeguard client holdings while permanent crypto-specific rules remain under development.

In a Tuesday notice, CIRO said the framework sets out its supervisory expectations for investment dealers operating crypto trading platforms, including custody limits, segregation standards, reporting obligations and tiered requirements for third-party crypto custodians.

The self-regulatory organization said the framework operates through binding terms and conditions of membership, rather than through amendments to its core rulebook. It is intended to provide investor protection and regulatory clarity while broader policy work continues.

“We expect that, over time, elements of this framework may inform the development of permanent rules or harmonized regulatory instruments as crypto asset markets mature,” CIRO added.

Under the framework, dealer members must hold crypto assets either with CIRO-approved digital asset custodians or under internal custody arrangements that meet baseline standards.

The regulator introduced a tiered custodian model that links capital, insurance, governance and technology-assurance requirements to the proportion of client assets a custodian is permitted to hold.

Tier 1 and Tier 2 crypto custodians are allowed to hold up to 100% of a dealer's crypto, subject to higher capital thresholds and enhanced assurance standards, including external cybersecurity reviews.

Lower-tier custodians face stricter caps, with Tier 3 and Tier 4 custodians permitted to hold up to 75% and 40% of a dealer’s crypto assets, respectively. Meanwhile, dealers’ internal custody is limited to 20% of client crypto assets.

Source: CoinTelegraph