• Canada’s latest move shifts regulatory focus away from trading activity toward custody, with crypto custody rules now structured around how and where platforms hold client assets rather than what they list or trade.
• CIRO’s interim framework introduces tiered limits for custodians and caps platform self-custody, reshaping market structure by favoring stronger governance, diversification, and institutional-grade custody arrangements.

Canada’s latest move on digital assets does not target trading activity or token listings. Instead, the focus is on custody. With new crypto custody rules now in effect, Canada’s regulators are tightening standards around where regulated platforms hold client crypto assets and how they manage custody risks.

The framework was issued by the Canadian Investment Regulatory Organization (CIRO) and applies to its dealer members that operate crypto asset trading platforms. The rules take effect immediately and introduce a tiered approach to crypto custody that links allowable exposure to the quality and risk profile of custodians.

The shift reflects a regulatory judgment shaped by past failures. In Canada, those failures are inseparable from the collapse of QuadrigaCX, which exposed how custody breakdowns can erase client assets even when trading activity itself appears orderly.

Why custody, not trading, is where regulators now intervene

Regulators have learned that trading rules offer limited protection if custody fails. Market conduct requirements do not prevent losses when private keys are lost, assets are commingled, or insolvency law is unclear.

For Canadian crypto regulation, custody has emerged as the critical control point. Weak custody arrangements concentrate operational and legal risk in a way that trading oversight cannot offset. When assets are poorly segregated or controlled by a single entity, failures can propagate quickly.

CIRO’s approach reflects a broader push toward clearer crypto custody standards. The goal is to reduce single-point-of-failure risk while maintaining continuity for platforms that already operate within the regulated perimeter.

How CIRO’s tiered custody framework actually works

CIRO’s interim Digital Asset Custody Framework introduces a risk-based structure built around four custodian tiers. Each tier carries a specific cap on how much client crypto a dealer member may place with custodians in that category.

Under the framework, Tier 1 and Tier 2 custodians may hold up to 100% of client assets, Tier 3 custodians are capped at up to 75%, and Tier 4 custodians are limited to up to 40%.

Higher-tier custodians are subject to stronger requirements around governance, audits, and financial resilience. These include capital or insurance expectations, with Tier 1 Canadian custodians required to maintain at least CAD $100 million. Lower-tier custodians face tighter percentage caps and reduced allowable exposure. The framework also addresses crypto custody rules Canada has previously applied on an interim basis, formalizing them into a single supervisory model.

The structure does not prohibit custody arrangements outright. Instead, it constrains exposure based on assessed risk. CIRO positions the framework as flexible, but enforceable, with custody decisions tied directly to measurable controls rather than broad policy judgments.

Market structure impact: who benefits, who feels pressure

While neutral in design, regulated crypto custody requirements tend to favor platforms with access to large, well-capitalized custodians. Firms that already rely on institutional custodians with established audit and governance practices can adapt more easily.

Smaller platforms may face higher costs or reduced flexibility. For some, meeting crypto custody standards will require restructuring existing arrangements or limiting client asset exposure. The framework therefore introduces indirect consolidation pressure without explicitly excluding participants.

This effect is structural rather than punitive. CIRO’s rules do not dictate business models, but they do reward scale, compliance infrastructure, and access to high-quality custody providers.

Why self-custody caps apply — even for regulated firms

One of the most notable features of the framework is the introduction of crypto self-custody limits for dealer members. Under the framework, CIRO permits dealer members to self-custody client crypto assets, but limits self-custody to 20% of total client and proprietary crypto assets under management, subject to internal control requirements.

The rationale is historical rather than ideological. Past failures showed that internal custody without strong governance can amplify risk. Concentrating key control inside a single operating entity exposes clients to operational errors and insolvency complications.

By capping self-custody, CIRO aims to balance operational flexibility with crypto investor protection that Canada’s regulators have emphasized since earlier enforcement actions. The focus is not on banning internal custody, but on preventing unchecked concentration.

>>> Read more: Canada Stablecoin Regulation Links to Open Banking

“Interim” rules with permanent consequences

CIRO has described the framework as interim, signaling that supervisory expectations may evolve. That designation matters because it allows the regulator to refine limits and requirements as data from supervision and audits accumulates.

For Canadian crypto regulation, custody has become a durable enforcement lever. Future adjustments are likely to focus on assurance standards, cross-border custodians, and the treatment of client assets during insolvency.

The framework does not eliminate failure risk. It reshapes how that risk is distributed and managed. In doing so, it marks a decisive step in formalizing custody as the cornerstone of Canada’s approach to regulated crypto markets.

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• In its 2025 budget, Canada lays the groundwork for stablecoin regulation, proposing a framework with 1:1 reserves and Bank of Canada oversight.
• The plan connects stablecoin regulation to the Open Banking Canada framework to modernize retail payments.
• If enacted, these rules could integrate fiat-backed stablecoins into Canada’s regulated payment infrastructure.

Canada’s 2025 Federal Budget takes a decisive step toward regulating fiat-backed stablecoins through a new national framework overseen by the Bank of Canada. The proposal links stablecoin rules with the country’s open-banking reforms, aiming to modernize retail payments while tightening consumer protection. For Ottawa, it’s not just about stablecoin regulation. It’s about building a safer, more competitive digital-finance system that can stand alongside those in the U.S. and Europe.

Canada’s First National Crypto-Payments Framework

Through its 2025 budget, Ottawa has proposed Canada’s first stablecoin framework, setting rules for fiat-backed stablecoins and integrating them into the country’s broader payments modernization plan. The government presents the policy as both a financial-stability measure and a catalyst for innovation under its digital-finance roadmap. It mirrors recent U.S. and U.K. initiatives, signaling that Canada aims to catch up with global peers on crypto-asset supervision.

What the Federal Budget Proposes

The proposed stablecoin framework establishes federal standards for issuers that wish to operate within Canada. However, only fiat-backed stablecoins will qualify, and each must maintain stablecoin reserves 1:1 in high-quality liquid assets. Holders must be able to redeem at par on demand.

The Bank of Canada will oversee compliance with reserve and reporting requirements under a federal supervisory framework, ensuring transparency and risk management. Ottawa plans to amend the Retail Payment Activities Act (RPAA) to include stablecoin service providers under its jurisdiction, giving regulators tools to monitor payments stability and enforce standards. Legislation to implement these measures is expected later in 2025, followed by public consultations.

Oversight and Consumer Protections

Under Bank of Canada oversight, issuers will face scrutiny comparable to payment system operators. Consequently, supervisors will verify that reserves remain fully backed and segregated from corporate funds. Redemption delays or opaque accounting could prompt enforcement actions.

The framework also embeds privacy, anti-money-laundering, and cybersecurity requirements, echoing existing financial-sector norms. Algorithmic or unbacked tokens will remain outside the perimeter of Canadian stablecoin law, focusing regulation strictly on redeemable, asset-backed instruments.

The Open-Banking Connection

The 2025 budget positions Canada’s stablecoin framework as part of a wider effort to modernize retail payments through its Open Banking framework. The government plans to finalize data-sharing standards by 2027, allowing consumers to authorize banks and fintechs to exchange financial data securely.

In this vision, regulated stablecoins could operate alongside traditional payment networks, leveraging API-based rails. Updates to the RPAA will clarify how such tokens can settle transactions in real time, while Bank of Canada oversight ensures interoperability and consumer protection.

Industry and Market Implications

Fintech and crypto-payment firms have welcomed the prospect of regulatory clarity. A defined stablecoin framework could grant them bank-grade credibility and open doors to mainstream adoption. Although compliance costs and licensing requirements may limit smaller entrants.

For larger providers, stablecoin licensing under the new model could pave the way for participation in regulated payment systems and cross-border remittance services. Market analysts note that Canada’s approach aligns with global best practices established in the U.S., U.K., and under the EU MiCA rules.

>>> Read more: US Stablecoin Law 2025: Key Changes for Compliance and DeFi

Broader Context and What Comes Next

Beyond stablecoins, the 2025 budget outlines investments in AI governance, digital ID, and fintech supervision, forming a cohesive digital-economy agenda. Draft legislation for Canada’s stablecoin regulation is expected later in 2025, followed by consultations extending into 2026.

If enacted, the Canadian stablecoin law would mark a turning point in North American policy alignment. Canada, long cautious about crypto regulation, now positions itself as an emerging leader in payments innovation and regulatory modernization through the Open Banking Canada framework.

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Regulatory Burden Forces Gemini To Exit Canada

The regulatory environment for cryptocurrency exchanges in Canada has been evolving rapidly. The Canadian Securities Administrators (CSA) are at the center of these changes, which introduced new regulations to increase investor protection. A key aspect of these rules is the requirement for crypto trading platforms to sign pre-registration undertakings (PRUs) to continue operating. This pre-registration framework restricts the use of stablecoins and tightens oversight on how exchanges manage assets and liquidity.

In a statement to its Canadian users, Gemini set a December 31 deadline for closing all accounts, giving customers 90 days to withdraw their assets. The exchange did not cite specific reasons for its exit. However, the growing complexity of meeting regulatory standards is widely believed to be the driving factor. This mirrors the decisions made by other crypto giants like Binance, which left the Canadian market in May 2023. They declared the new requirements untenable for their operations.

Broader Crypto Exodus from Canada

Gemini exiting Canada is part of a broader trend of cryptocurrency exchanges folding their operations in the country. Earlier, Binance, OKX, and Bybit also announced their departures, attributing their decisions to the increasingly restrictive compliance framework. In particular, the CSA’s rules limit the use of stablecoins without prior approval and impose stringent requirements for investor protections. These restrictions, aimed at preventing a repeat of the major insolvencies seen in the crypto sector (such as those of Voyager Digital and FTX), have created a compliance burden that many international exchanges find hard to bear.

However, not all exchanges have decided to leave. Kraken and Coinbase, for example, have opted to continue operating in Canada, complying with the CSA’s framework by filing PRUs. Coinbase, in particular, has emphasized the importance of the Canadian market and is working to introduce new products. One example is a stablecoin tied to the Canadian dollar.

Challenges for Global Exchanges in Canada’s Regulatory Climate

The regulatory environment in Canada is indicative of the challenges facing cryptocurrency exchanges globally. While countries like the U.S. and the European Union are gradually refining their regulations to provide clearer frameworks, Canada’s approach has been notably more restrictive. The CSA’s measures are designed to mitigate risks for retail investors. Unfortunately, the complex compliance standards have deterred many exchanges from continuing their operations in the country.

Gemini’s departure underscores the difficulties that arise when regulatory environments differ significantly across regions. It also highlights a growing divide. Some jurisdictions are developing crypto-friendly policies, others are ramping up regulatory scrutiny. For crypto exchanges, navigating these varying regulations remains a significant challenge, and decisions like Gemini’s may signal a trend of exchanges prioritizing markets with more favorable regulatory conditions.

>>> Read more: Bank of Canada Halts Digital Loonie Over Privacy Concerns

As the regulatory landscape for digital assets continues to evolve, Gemini’s decision to exit Canada reflects the growing difficulties for cryptocurrency exchanges to operate in highly regulated markets. The exchange’s departure, alongside others like Binance and OKX, points to the broader challenges of complying with stringent oversight measures. For Canadian users, the exit of major exchanges represents a significant shift in the accessibility of crypto services. For the global crypto industry, it highlights the pressing need for harmonized regulatory approaches across jurisdictions.

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A Shift in Focus: Public Concerns Take Center Stage

The Bank of Canada’s decision to shelve its digital loonie project is largely attributed to the findings of a public consultation conducted in 2022 and 2023. Nearly 90,000 Canadians participated in the survey, and the results were clear: most respondents were wary of a CBDC. Among the primary concerns raised were privacy, cybersecurity, and the need for such a digital currency in a landscape where existing payment methods, like debit cards and mobile banking, already function effectively. A staggering 87% of participants said they would never use a digital Canadian dollar, while 92% indicated they preferred existing payment methods.

>>> Read more: CBDC vs Cryptocurrency: Decoding Digital Currencies

This public sentiment has become a key factor in the Bank of Canada’s decision to hit pause on the CBDC initiative. Governor Tiff Macklem emphasized that while the central bank has accumulated valuable research on the subject, there is currently no compelling case to move forward with the retail digital currency. Instead, the bank will redirect its focus to policy development and research surrounding Canada’s broader payment systems. They want to ensure that these systems remain modern and secure in an increasingly digital economy.

The Global Context: A Divergence from International Trends

The decision to step back comes at a time when many central banks around the world are accelerating their own CBDC projects. China’s digital yuan pilot program, for instance, is one of the most advanced. It has processed nearly $1 trillion in transactions as of mid-2024. Smaller nations like the Bahamas and Nigeria have fully launched their digital currencies and are expanding their use. As of September 2024, over 130 countries are either exploring or actively developing CBDCs.

Canada’s choice to hold off on a retail CBDC stands in contrast to these global developments. However, this decision doesn’t mean that the digital loonie is permanently off the table. The Bank of Canada has stated that it will continue to monitor global CBDC initiatives. It will be ready to act if the need arises in the future. The extensive research conducted over the past several years will serve as a foundation should the bank revisit the idea of a digital currency later on.

Privacy vs. Innovation: The Core of the Debate

At the heart of the Canadian public’s opposition to the CBDC lies the issue of privacy. Many Canadians fear that a government-issued digital currency could open the door to increased surveillance, particularly regarding personal financial transactions. This concern is not unique to Canada; debates over privacy have surfaced in many countries considering CBDCs. Critics argue that such currencies could grant governments unprecedented insight into citizens’ spending habits.

On the flip side, proponents of CBDCs argue that digital currencies offer several advantages. They improve financial inclusion, expedite cross-border payments, and reduce reliance on private payment platforms. Moreover, some central banks, including those in the Eurozone, have pointed to the need for sovereign digital currencies to counterbalance the growing influence of private cryptocurrencies and stablecoins. They believe these currencies pose potential risks to monetary sovereignty.

In Canada’s case, the Bank of Canada has chosen to focus on strengthening its payment systems rather than rushing to adopt a digital loonie. The bank will continue its research into the broader payments ecosystem, including cross-border payments and policies related to wholesale financial infrastructure. This pragmatic approach reflects a broader debate about whether digital innovation should prioritize privacy or if the potential benefits of a CBDC outweigh these concerns.

>>> Read more: IMF’s REDI Framework and the Role of Public Trust

A Pause, Not an End

While the Bank of Canada has paused its CBDC project, this decision represents more of a recalibration than an outright rejection. With privacy concerns front and center, the bank is taking time to reassess the necessity and viability of a digital loonie. In the meantime, it will focus on keeping Canada’s financial infrastructure secure and adaptive to future needs. As CBDC developments continue globally, Canada will keep a close eye on international trends. It remains ready to re-enter the conversation if the landscape – and public sentiment – changes.

This decision underscores the complex trade-offs between privacy and innovation, a balancing act that will define the future of digital currencies worldwide.

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The Canadian company has allegedly lost all their funds, about 913 Bitcoins worth approximately $6 million USD.

Soon after that, the account was deleted by Twitter, which led many crypto fans to the suspicions it was just another scam.

Just two days ago, on October 27th, the company announced that their upgrade is ready and from now on, users can rejoice on their software Version 2.0.0. Just a day after, MapleChange declared a hack and shut all its accounts down. Now, there is another account on Twitter, called @MapleChange’d, which posts news and updates about the exchange.

A real hack or an exit scam?

Social media is now a complete mess. Tweets are posted every couple of minutes with statements from “It was an obvious scam, people!” to “They were hacked for real”.

MapleChange had an exceeding trading volume for the last two weeks. According to CoinGecko’s chart, on some days the volume went up to $30,000 and on some, like 22nd October even over $60,000 USD. Exactly because of the raised profits, many traders assume it was a take-it-and-go kind of scam.

At the same time, MapleChange’s second Twitter account keeps posting ways to connect them and to refund at least a part of users’ funds. However, this does not seem a legitimate way of refunding and it is not yet clear if any users managed to withdraw their assets back.

However, CrispyBull stays up-to-date with the case’s outcome and will immediately report for any news.

The post Canadian Crypto Exchange Claims to be Hacked, Traders Doubt it is a Scam appeared first on CrispyBull.

The telephone scam, reported by CBC Canada, took place this September. Since then the anonymous victim of the raiders was fighting with the company, which supports the crypto ATM at a restaurant in Charlottetown.

It’s really hard. I need that money back,

The woman explained to the Canadian news portal, while crying, and added:

I want other people to know what happened to me, so it doesn’t happen to them.

She tried to get her money back by appealing the crypto start-up Instacoin which owns the machines. The thing is that her cash was still in the ATM, where she converted Canadian dollars to Bitcoins and transferred them to the scammers.

Both sides involved in this case are completely sympathetic to the woman, said the judge, responsible for the case, Nancy Orr, while announcing the court decision.

It’s up to the Bitcoin purchaser to know what they’re doing.

The ATM provider Instacoin stated they understand her pain, but they did not put her under distress. What the firm does, is only to convert currencies, fiat to cryptos and the opposite, and to executes the transactions. Unlike the normal bank wires, cryptocurrency transfers are instant, anonymous and irreversible.

Crypto ATMs are expanding rapidly worldwide, as CrispyBull recently reported. Only in Canada, there are now 676 machines, according to Coinatmradar. Just for the month of September, 28 new Bitcoin ATMs were launched in the country.

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