Third Party Crypto-asset Custody Arrangement
CRA-8.2.3
For the purposes of Paragraph CRA-8.2.2(b), where a
licensee provides a third party crypto-asset custodian to a client it must undertake an appropriate risk assessment of that crypto-asset custodian.Licensees must also retain ultimate responsibility for safe custody ofcrypto-assets held on behalf of clients and ensure that they continue to meet all their regulatory obligations with respect to crypto-asset custody service and outsourced activities.Amended: April 2023
Added: April 2019CRA-8.2.4
In undertaking an appropriate risk assessment of the third party
crypto-asset custodian in accordance with Paragraph CRA-8.2.3,licensees should take into account any or all of the following:(a) The expertise and market reputation of the third partycrypto-asset custodian, and once acrypto-asset has been lodged by the licensee with the third partycrypto-asset custodian, thecrypto-asset custodian's performance of its services to thelicensee ;(b) The arrangements, including cyber security measures, for holding and safeguardingcrypto-assets ;(c) An appropriate legal opinion as to the protection ofcrypto-assets in the event of insolvency of the custodian;(d) Whether the third partycrypto-asset custodian is regulated and by whom;(e) The capital or financial resources of the third partycrypto-asset custodian;(f) The credit rating of the third partycrypto-asset custodian; and(g) Any other activities undertaken by the third partycrypto-asset custodian and, if relevant, any affiliated companyAmended: April 2023
Added: April 2019CRA-8.2.5
When assessing the suitability of the third party crypto-asset custodian, the
licensee must ensure that the third partycrypto-asset custodian will provide protections equivalent to the protections specified in this Section and applicableclient asset andclient money protection rules as specified in Chapter CRA-4.5.Amended: April 2023
Added: April 2019CRA-8.2.6
A
licensee that safeguards, stores, holds or maintains custody ofcrypto-assets with a third partycrypto-asset custodian, must establish and maintain a system for assessing the appropriateness of its selection of thecrypto-asset custodian and assess the continued appointment of thatcrypto-asset custodian periodically as often as is reasonable. Thelicensee must make and retain a record of the grounds on which it satisfies itself as to the appropriateness of its selection or, following a periodic assessment, continued appropriateness of thecrypto-asset custodian.Amended: April 2023
Added: April 2019CRA-8.2.7
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019
