The regulatory map of Canada for digital asset custody

Canada has charted a new path toward regulating the crypto industry with the introduction of stricter rules on digital asset custody. This development marks a significant step in shaping the regulatory landscape involving investors and trading platforms across the country.

The New CIRO Framework and Supervision Requirements

CIRO, Canada’s investment regulatory authority, has implemented more rigorous provisions to govern digital asset management. The framework is designed to raise safety and protection standards within the sector by imposing tighter supervision requirements on cryptocurrency trading platforms. According to information released by NS3.AI, the implementation took effect immediately.

The main goal of the new regulatory setup is to mitigate risks faced by investors through more robust control mechanisms and more transparent, verifiable asset custody obligations.

Protecting Investors: Lessons from QuadrigaCX

The push for stricter regulations stems from the turbulent past of Canada’s cryptocurrency market. The collapse of QuadrigaCX, one of the country’s largest trading platforms, highlighted systemic vulnerabilities and the need for more impactful regulatory interventions. This event significantly eroded investor confidence in the sector.

CIRO seized the opportunity to rebuild market credibility by introducing regulations that directly address vulnerabilities identified in previous years. Canada’s new regulatory map aims to restore trust between market operators and savers.

What Changes for Trading Platforms

For industry operators, the new provisions represent a significant change in operational criteria. Platforms must now comply with stricter custody standards and undergo more rigorous supervision to ensure the safety of client funds.

Although these measures are more restrictive, they are designed to strengthen the stability of the entire ecosystem and protect digital asset investors from uncontrolled risks.