CIRO unveils new crypto custody framework for Canadian trading platforms
Canada's investment regulator, CIRO, immediately implemented a new digital asset custody framework to reduce investor risk and respond faster to crypto failures.Summary
The Canadian Investment Regulatory Organization (CIRO) has rolled out its new Digital Asset Custody Framework, effective immediately, to tighten standards for crypto trading platforms and mitigate investor risks like hacking, fraud, and insolvency, specifically aiming to prevent failures similar to the 2019 QuadrigaCX collapse.
The framework, developed in consultation with platforms and custodians, features a tiered, risk-based structure to strengthen custody arrangements while balancing innovation and investor protection. CIRO stated it will proactively update the framework if emerging risks or market practices signal that current expectations are misaligned, rather than waiting for a failure to occur.
CIRO, a self-regulatory body with quasi-judicial authority, oversees investment dealers and trading activity in Canada. This move aligns with Canada's cautious regulatory approach, which emphasizes registration, custody, and disclosure requirements for trading platforms.
(Source：CoinDesk)