The Canadian Investment Regulatory Organization (CIRO) has introduced temporary standards for the custody of cryptocurrencies and tokenized assets. The document outlines the obligations of dealers to protect client funds until permanent legislation is enacted.
The new standards are enforced through mandatory CIRO membership conditions, rather than amendments to the main rulebook. The regulator aims to ensure investor protection and regulatory clarity while work on a global regulatory framework continues.
The regulator has implemented a tiered model for custodians. Capital, insurance, and technology audit requirements depend on the proportion of client assets an organization is allowed to hold:
- Tiers 1 and 2: may hold up to 100% of a dealer’s cryptocurrency. They are subject to heightened capital requirements and external cybersecurity audits;
- Tier 3: permitted to hold up to 75% of assets;
- Tier 4: the limit is 40%.
Dealers may hold no more than 20% of client funds independently.
For foreign companies, capital requirements are higher due to cross-border regulatory risks and bankruptcy issues.
CIRO intends to monitor compliance through continuous oversight and reporting. This will allow the regulator to respond swiftly to emerging risks without the need for long-term rule approval.
Back in April 2025, Canadian companies introduced the world’s first spot Solana-ETFs to the market.