CFTC No-Action Letter Allows Crypto Trusts in Derivatives Settlements Amid Lingering Uncertainties

Crypto trust companies are now permitted to participate in U.S. derivatives settlements, a market historically dominated by banks, following a recent no-action letter from the Commodity Futures Trading Commission (CFTC). However, regulatory and political uncertainties remain regarding the long-term implications of this development.

The CFTC issued the no-action letter on November 5, allowing derivatives clearinghouses to utilize trust companies for daily settlements. This function was previously restricted to banks under CFTC regulations. The decision stems from a request made by Nodal Clear on October 29 and aims to address an inconsistency between federal commodities law and CFTC Regulation 39.14, which pertains to where customer funds can be held.

Under the relief, trust companies can perform settlement services if they meet the same requirements as traditional settlement banks. This move opens up a market that handles significant financial flows. For context, the CME Group transferred an average of $8.7 billion per business day through its clearing systems in the first half of 2026, and $6.7 billion per business day in 2025. Nodal Clear had also partnered with Coinbase in 2025 to integrate USDC into U.S. futures trading, with Coinbase Custody Trust expected to provide daily settlement services under that arrangement.

Several crypto firms have been expanding their institutional financial services or securing national trust bank approvals. BitGo launched its Global Markets division on November 4, and Coinbase’s national trust bank charter became effective on November 6. These developments reflect a broader trend of crypto companies moving into federally regulated financial services.

Despite the regulatory relief, questions persist about the durability of this opening. The CFTC’s no-action letter is staff relief and does not alter the underlying regulation; it can be withdrawn, particularly if there is a change in Commission leadership. More formal action, such as amending the regulation, would be necessary to provide a more secure, long-term role for trust companies in derivatives settlement.

Adding to the uncertainty, the U.S. political landscape has shifted. Democrats secured control of both chambers of Congress in the November 3 midterm elections. This incoming Congress, which takes office in January, will have greater power to scrutinize the CFTC’s regulatory agenda. Furthermore, the Senate Agriculture Committee, which oversees the CFTC, could see increased influence from figures like Senator Sherrod Brown, who has been a vocal critic of the crypto industry’s expansion into banking services.

Traditional banking groups have also voiced concerns. The Independent Community Bankers of America sued the Office of the Comptroller of the Currency (OCC) in October, challenging its national trust bank charter rules. They argue these rules could allow crypto firms to conduct banklike activities without meeting all the requirements imposed on conventional banks.

The CFTC’s decision does not place trust companies in a better or worse position than traditional banks, and a trust company charter is not considered a regulatory shortcut. The relief provided is revocable, and the long-term role of these entities in derivatives settlement remains subject to regulatory and political developments.

Why This Matters

The materials describe a narrow update: The CFTC issued a no-action letter allowing derivatives clearinghouses to use trust companies for daily settlements, a function previously restricted to banks. The long-term role of crypto trust companies in US derivatives settlements.

Broader Context

Source materials place the factual news in this context: Crypto custodians are moving into a market handling billions in daily settlements, but regulatory relief and a shift in congressional control leave questions over their long-term role.