Canada Crypto Custody Framework Aims to Protect Investors

2026-02-04 10:22:55

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Canada is making crypto custody safer with new rules for digital asset platforms. On February 3, 2026, the Canadian Investment Regulatory Organization (CIRO) released its Digital Asset Custody Framework. The framework requires platforms to clearly explain how they store customer funds and hold firms responsible if money goes missing.

Ending Single-Key Custody

The new rules ban “single-key” custody, where one key controls all client assets. Instead, platforms must use regulated third-party safeguards to protect funds. This reduces the risk of major losses if a key is compromised.

The framework addresses lessons from past failures, such as the FTX collapse in 2022. It also requires platforms to segregate at least 80% of client assets under a tiered, risk-based system, following guidance from the 2021 Canadian Securities Administrators (CSA) guidelines.

More Transparency and Accountability

Platforms must now disclose their storage practices clearly to customers. They also face legal responsibility if they mismanage funds. These rules aim to boost investor confidence and ensure users trust crypto platforms to protect their assets.

The framework increases operational transparency and sets clear rules for custody services. However, platforms may face higher operational costs because of these requirements.

Following Global Crypto Trends

Canada’s rules reflect global shifts in crypto regulation. The European Union’s MiCA rules also standardize how platforms store crypto assets. By requiring secure third-party custody, Canada follows international best practices.

The framework reduces vulnerabilities while letting platforms operate safely. It strengthens trust in the Canadian crypto ecosystem and protects users from major losses.

Strengthening Trust and Security in Crypto

Crypto platforms in Canada will need to upgrade their custody models and add stronger safeguards. Customers can expect more protection, clearer disclosures and greater accountability.

Overall, Canada’s new framework makes digital asset custody safer. It ensures platforms handle funds responsibly, reduces risk, and builds trust in the growing crypto market.

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