Canada Tightens Crypto Regulation with Six-Body Framework

Canada has tightened its crypto regulatory framework in 2026, bringing six overlapping bodies under one tightening perimeter. The Canadian Investment Regulatory Organization (CIRO) issued a Digital Asset Custody Framework on February 3, requiring segregated wallets and stronger custody controls.

The framework sets out formal expectations for CIRO membership, with a permanent rule pending. Parliament passed the Stablecoin Act under Bank of Canada supervision in March, creating stricter rules for stablecoin issuers. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has cancelled dozens of crypto firms' registrations under a sharply higher penalty ceiling.

Regulators have imposed record penalties on Cryptomus ($126 million) and KuCoin ($14 million), with FINTRAC revoking 50 MSB registrations, including 47 crypto firms. The Office of the Superintendent of Financial Institutions (OSFI) has raised banks' crypto exposure limit to 5% of Net Tier 1 capital.