Daily Crypto Briefs 
TORONTO, Feb. 9, 2026
The Canadian Investment Regulatory Organization (CIRO) on Feb. 3 published an interim Digital Asset Custody Framework for member firms that run crypto-asset trading platforms, introducing a four-tier custodian approval system that caps Tier 4 arrangements, the benchmark for internal custody, at 40% of client crypto as bitcoin traded near $69,500, a sign regulators increasingly treat custody as the main point of control.
Canada’s financial system is in a cautious phase, with recession risk still elevated in prediction markets as households, lenders, and regulators balance growth, debt service, and tighter risk controls.
Odds of Canada recession before 2027 Live
CIRO said the framework is effective immediately as an interim measure through member terms and conditions, aiming to set baseline expectations for how platforms safeguard customer assets. The move comes as regulators globally try to route crypto activity through licensed intermediaries, including in Russia where the central bank has floated retail access under tests and caps.
Market snapshot: Bitcoin near $69,500 as custody rules tighten
Bitcoin was down about 2.5% over the past 24 hours at roughly $69,517 as of 15:17 UTC on Feb. 9, while ether fell about 3.2% to around $2,058. Total crypto market cap was about $2.44 trillion, 24-hour trading volume was roughly $114 billion, and bitcoin dominance was near 56.9%.
CIRO’s Digital Asset Custody Framework: tiers, caps, and assurance
“Custody is one of the most critical points of risk in the crypto ecosystem,” Alexandra Williams, CIRO’s chief membership officer, said in the organization’s guidance release, adding that CIRO is trying to protect investors while still allowing regulated dealers to innovate responsibly.
CIRO’s notice frames the policy response around risks that are hard to see from the trading screen: key management and signing controls, insolvency and fraud risk at custodians, cyberattacks, and the legal question of who actually owns the assets if an intermediary fails. Canada’s longest-running cautionary tale is the OSC’s QuadrigaCX report, which found the exchange’s collapse exposed basic custody and governance failures that left customers unable to access funds.
The new framework applies to dealer members operating crypto-asset trading platforms and sets a tiered list of “acceptable” custodians, ranging from Tier 1 to Tier 4, including internal custody if standards are met. Under CIRO’s caps, a dealer can hold up to 100% of client crypto with Tier 1 or Tier 2 custodians, but only up to 75% with Tier 3 custodians and up to 40% under Tier 4 arrangements, a category CIRO says also serves as the benchmark for internal custody.
CIRO said the interim terms cover crypto assets, stablecoins, and tokenized assets, and it draws a line between crypto custody and tokenized securities custody. The notice says tokenized securities must be held through acceptable securities locations while also meeting additional digital-asset custody safeguards, and CIRO said it expects to amend the interim terms as regulators develop a permanent framework for tokenized securities.
To separate tiers, CIRO pairs financial-resource tests with audit and assurance expectations. The notice sets minimum capital thresholds (for example, $100 million for Tier 1 Canadian custodians and $10 million for tiers 2 through 4, with higher thresholds for foreign custodians), and it outlines requirements that include independent assurance reports such as SOC 2 Type II and crypto-asset custody assurance, plus penetration testing and incident reporting.
CIRO also points to insurance as a gating factor. The notice references coverage such as fidelity insurance and specie insurance, while flagging that insurance availability and exclusions vary, a detail that matters if smaller platforms are forced to choose between paying for higher-cost coverage or pushing custody to third parties.
The Canadian framework lands as other major markets debate who gets to “own the pipes” of crypto compliance. In the U.S., lawmakers are still arguing over market-structure boundaries and conflicts, a fight we track in our explainer on the CLARITY Act timeline and 2026 markup risk.
CIRO’s custody trap: consolidation pressure and surveillance worries
By turning custody into a tiered compliance gate, including stricter assurance, insurance, and higher thresholds for foreign custodians, the framework could concentrate retail flow in a small set of approved providers, increasing both cost pressure on smaller platforms and the amount of data and control held by the largest custody rails. CIRO itself warned of “concentration risk” when the industry relies on a small number of custodians, setting up a tension between investor protection and market structure.
What remains unclear is how quickly CIRO will move from interim terms and conditions to permanent rules, how many custodians will be approved at each tier, and whether insurance capacity expands enough to keep compliance costs from becoming a barrier to entry. Another marker to watch is how Canada coordinates custody, tax, and reporting policy as global standards like the OECD’s Crypto-Asset Reporting Framework move toward broader adoption, and how Canada’s rulebook compares with prohibition-first models such as China’s latest crackdown signals we covered in China’s renewed crypto ban push.
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Fact-checked by: Daily Crypto Briefs Fact-Check Desk
Frequently Asked Questions
What is CIRO’s Digital Asset Custody Framework?
It is CIRO’s interim set of custody expectations for dealer members that operate crypto-asset trading platforms, covering how client digital assets must be held, safeguarded, and reported under CIRO membership terms and conditions.
Does CIRO ban exchanges from holding client crypto themselves?
No. CIRO’s framework allows internal custody if the dealer meets the custody technology and control expectations, but it limits how much client crypto can be held under higher-risk arrangements.
What are the custodian tiers and limits?
CIRO’s notice describes four tiers and caps the maximum share of a dealer’s client crypto assets that can be held with Tier 3 custodians (up to 75%) and Tier 4 arrangements, including internal custody (up to 40%). Tiers 1 and 2 may hold up to 100%.
Does the framework cover stablecoins and tokenized assets?
Yes. CIRO’s notice says the framework applies to crypto assets, stablecoins, and tokenized assets, and it sets additional expectations for tokenized securities held through acceptable securities locations.
Is the framework permanent regulation?
No. CIRO describes the framework as an interim measure that is effective immediately and is intended to bridge the gap until permanent custody rules are implemented through a formal rulemaking process.
What should investors watch next?
Watch for CIRO’s permanent-rule consultation and any updates to custodian approvals, insurance expectations, and limits on internal custody as dealers and regulators gain experience with the interim framework.