The Commodity Futures Trading Commission (CFTC) has cleared the way for crypto firms holding federal trust charters to settle daily trades by designating trust companies as eligible settlement agents. This approval comes after the CFTC’s Division of Clearing and Risk issued a letter in early November, announcing it will not seek enforcement action against derivatives clearinghouses that utilize federally chartered trust companies instead of traditional banks for daily settlements.
Boost for federally chartered crypto trusts
The CFTC’s move is a significant advantage for firms that have received trust charters since the Office of the Comptroller of the Currency (OCC) began granting conditional approvals in December 2025. Nationally chartered trust banks are authorized to custody digital assets and handle payment settlements, but they are not permitted to take deposits, make loans, or hold Federal Deposit Insurance Corporation (FDIC) coverage.
Senator Elizabeth Warren, in a letter dated May 18 to Comptroller Jonathan Gould, stated that the OCC has approved at least nine crypto trust charters since late 2025. While welcoming this development, traditional banking institutions and community banks have expressed strong opposition, with some initiating legal challenges.
No-action letter outlines settlement criteria
The CFTC’s Staff Letter 26-30, signed by Acting Director Richard Haynes, clarifies that the Division of Clearing and Risk will not recommend enforcement against derivatives clearing organizations that use trust companies to process daily settlements with their clearing members. The letter specifies that these organizations must treat trust companies as settlement banks to comply with Regulations 39.14(c) and 39.14(d).
This clarification came in response to a request from Nodal Clear, which acts as the clearinghouse for CFTC-registered derivatives exchanges including Nodal Exchange and Coinbase Derivatives. However, the guidance will also apply to any clearinghouse meeting the CFTC’s requirements, not solely Nodal Clear.
The CFTC’s November 5 letter clarifies that derivatives clearinghouses may use trust companies as settlement banks, provided all existing regulatory obligations are met, despite references to banks only in the original rules dating back to 2011.
Nodal proposed that if trust companies are trusted to hold customer funds, they should also be permitted to process settlements. Bringing trust companies into the daily settlement process could enable more seamless integration of digital assets as eligible collateral. The New York Department of Financial Services (NYDFS) applies the same regulatory standards to both banks and trust companies under state law, according to Nodal.
Community banks challenge OCC approvals
Resistance from traditional banks to the expanded role of crypto trust companies has already reached federal court. The Independent Community Bankers of America (ICBA) filed a lawsuit against the OCC and Comptroller Jonathan Gould in October 2026. The ICBA’s action, brought under the Administrative Procedure Act, seeks to overturn an OCC rule, a 2021 interpretive letter, and the OCC’s decision to grant a charter to crypto firm Protego Holdings.
ICBA President and CEO Rebeca Romero Rainey argued that the OCC’s trust charter approvals create “a gaping hole in financial regulation,” challenging the agency’s authority and requesting court intervention.
Comptroller Gould, commenting publicly at a Semafor event in May, defended the agency’s chartering decisions, stating the OCC no longer maintains “a zero risk tolerance.” The ongoing dispute centers on whether trust companies should be permitted to perform core banking operations for the crypto industry without the full obligations and oversight applied to traditional banks.
As the CFTC’s policy expands the functional role of trust companies in derivatives markets, community banks warn that the changes may lead to a further reduction in their traditional market share and influence over digital asset activity.
With the CFTC’s settlement policy now in effect and legal battles playing out in federal courts, stakeholders throughout the financial sector are closely watching the outcome for future definitions of custody, settlement, and regulation in crypto derivatives trading.
Market participants tracking the CFTC’s evolving settlement guidance and ongoing court challenges may benefit from CryptoAppsy’s live news monitoring feature, which aggregates regulatory updates and legal developments relevant to crypto trust companies and derivatives clearing. This tool can help users stay informed as new rules and court decisions affect the landscape for digital asset custody and settlement processes.
