Canada’s CIRO formalizes interim crypto custody framework

Canada’s self-regulatory organization, the Canadian Investment Regulatory Organization (CIRO), has officially established an interim framework for cryptocurrency custody. This initiative comes as part of ongoing efforts to regulate the rapidly evolving crypto sector, providing an immediate structure while more comprehensive regulations are being developed.

The newly released framework focuses on several critical components, including custody limits, capital requirements, and reporting obligations for firms involved in cryptocurrency custody. By defining these parameters, CIRO aims to enhance consumer protection and ensure that the entities handling digital assets adhere to established financial standards.

Under this interim framework, CIRO has set specific custody limits, which outline the maximum amount of digital assets that can be held by a single custodian. This measure is intended to mitigate risks associated with the concentration of assets and promote a more diversified approach to crypto custody. Additionally, capital thresholds have been established, requiring custodians to maintain a certain level of financial resources to safeguard client assets effectively.

Reporting standards have also been introduced, mandating that custodians regularly report their holdings and operations to CIRO. This transparency is designed to increase trust in the crypto market and provide regulators with better oversight of the activities within this sector.

CIRO's interim measures are part of a broader strategy to adapt to the growing importance of digital currencies and their integration into the financial system. As the regulatory landscape continues to evolve, CIRO is working closely with stakeholders to refine these guidelines and move toward more permanent regulations that can address the unique challenges presented by the cryptocurrency market.

While these interim measures provide a necessary framework for current operations, CIRO emphasizes that they are not a substitute for comprehensive regulation. The organization is committed to ongoing engagement with industry participants to develop a robust regulatory environment that enhances safety and security for all market participants.

Key Takeaways

CIRO has introduced an interim framework for cryptocurrency custody, including custody limits and capital thresholds.
The framework aims to enhance consumer protection and promote transparency in the crypto market.
Custodians are now required to report their holdings regularly to CIRO for better oversight.
These measures are temporary as CIRO works towards implementing more permanent regulations in the future.

This article was inspired by reporting from CoinTelegraph. · Report an issue