Canada’s investment regulatory body has implemented a new framework that establishes a tiered system for cryptocurrency custodians. This system specifies the allowable proportion of client assets that custodians can hold based on their classification within the tiers.
The rules aim to provide clearer guidelines for the custody of digital assets, enhancing oversight and risk management in the crypto sector. Custodians will now be subject to different requirements depending on their tier, which reflects their size and the level of client assets under management.
**Why this matters**
The new framework seeks to improve investor protection by ensuring that custodians maintain appropriate controls over client assets. By introducing a tiered approach, regulators can better tailor oversight to the varying risks posed by different custodians, promoting greater stability and transparency in the cryptocurrency market.
Source: NewsData