The Canadian Investment Regulatory Organization has formalized its interim custody framework for crypto and tokenized assets. The rules set supervisory expectations for dealers on crypto platforms, including a tiered system for approved custodians with varying capital and insurance requirements. The framework operates through binding membership terms while permanent crypto-specific rules are developed.
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 recent notice, the self-regulatory organization said the framework sets supervisory expectations for investment dealers operating crypto trading platforms. It includes custody limits, segregation standards, reporting obligations and tiered requirements for third-party crypto custodians.
“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. The framework operates through binding terms and conditions of membership rather than amendments to its core rulebook.
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 can 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. 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.
CIRO also set minimum capital requirements for custodians that scale by risk and jurisdiction. Higher requirements apply for foreign companies to account for cross-border enforcement and insolvency uncertainty.
The custody guidance comes as Canadian authorities continue to work on broader crypto regulations. On Dec. 17, 2025, the Bank of Canada said it would only support high-quality, fiat-backed stablecoins as part of its planned regulatory framework.
