Canada Tightens Regulations on Cryptocurrency Storage, 2026/02/05 14:52:02

The Canadian Investment Regulatory Organization (CIRO) has implemented new, stricter standards for the storage of crypto assets. These updated regulations took effect on February 3.

According to the revised CIRO requirements, custodial services are categorized into four tiers based on the financial stability of the business, insurance conditions, and asset management strategies. Each tier has a limit on the percentage of client crypto assets that custodians are permitted to hold: up to 100% for the highest tiers and up to 40% for the lower tiers. To mitigate financial risks, crypto platforms are advised to retain no more than 20% of user assets in their own custody.

Crypto services are required to collaborate with regulated custodial services to safeguard investors from asset loss and theft, as well as from technical failures, CIRO announced.

The regulator’s requirements mandate that crypto platforms and custodians conduct independent audits and ensure that the assets they hold are insured. Additionally, companies must enhance their management of access keys to wallets, keep client funds separate from their own assets, and perform regular checks for technical vulnerabilities. The agreement with crypto platforms must clearly outline who is responsible in the event of asset loss due to negligence or system failure.

In 2024, Canada updated its oversight rules for investment crypto funds, citing the need for increased transparency in the circulation of digital assets. Previously, Canadian authorities had pledged to implement a new tax reporting system for crypto assets (CARF) to combat tax evasion.