EDX Markets Pursues OCC Trust Bank Charter for Institutional Crypto Custody

EDX Markets, an institutional crypto exchange, has submitted an application to the US Office of the Comptroller of the Currency (OCC) to establish a national trust bank. The proposed entity, EDX Trust, would operate as a non-depository national bank, providing crypto custody, asset management, and trade-settlement services. This initiative seeks to address structural risks in crypto markets by separating custody and settlement from trading functions, which are often combined in a single platform, creating potential conflicts of interest and single points of failure. The trust bank would offer fiduciary asset management services, invest client cash and stablecoin balances in highly liquid assets, and facilitate trading through a riskless principal model with end-of-day net settlement. EDX Trust plans to operate online from Chicago and target institutional clients such as broker-dealers, futures commission merchants, and registered investment advisers. By moving these functions into an OCC-chartered entity, EDX aims to offer services nationwide under a single regulatory framework while meeting custody requirements for regulated institutions. EDX Markets, founded in 2022, is backed by traditional market participants including Citadel Securities, Virtu Financial, Fidelity Digital Assets, and Hudson River Trading. The application aligns with a broader trend of crypto and financial companies pursuing national trust bank charters to expand institutional services under federal oversight. Recent applicants include Zerohash, Coinbase, Laser Digital, and Payoneer, as well as traditional financial institutions like Morgan Stanley. The OCC has been issuing conditional licenses to various applicants, including Bridge, Stripe, and Crypto.com, following approvals in December for Ripple Labs, Circle Internet Group, Fidelity Digital Assets, Paxos, and BitGo. However, the pace of approvals has drawn scrutiny, with the American Bankers Association urging the OCC to slow the process due to unresolved oversight under pending US stablecoin legislation.