Canada Implements New Crypto Custody Rules Following QuadrigaCX Collapse
- The Canadian Investment Regulatory Organization (CIRO) has introduced a new Digital Asset Custody Framework to enhance investor protection.
- This framework aims to address risks such as hacking, fraud, and weak governance that have previously exposed investors.
- QuadrigaCX’s collapse in 2019 resulted in $123 million of customer funds being unaccounted for after CEO Gerald Cotten’s death.
- The new rules include a tiered, risk-based structure for custody arrangements to better manage risks while supporting innovation.
- CIRO will proactively update the framework based on emerging custody and cyber risks or shifts in market practices.
The CIRO’s updated framework reflects a cautious approach to crypto regulation in Canada, emphasizing investor protection through registration and custody requirements. The move comes after significant failures like QuadrigaCX highlighted the need for stronger oversight in the digital asset space.
With $123 million still missing from the QuadrigaCX incident, these new rules aim to prevent similar failures by ensuring robust custody practices are in place.(Source)
