diff --git a/packages/wallet/wallet-toolbox/src/storage/StorageKnex.ts b/packages/wallet/wallet-toolbox/src/storage/StorageKnex.ts
index 01f7f67cc..0715a817f 100644
--- a/packages/wallet/wallet-toolbox/src/storage/StorageKnex.ts
+++ b/packages/wallet/wallet-toolbox/src/storage/StorageKnex.ts
@@ -134,8 +134,8 @@ export class StorageKnex extends StorageProvider implements WalletStorageProvide
   protected override supportsActionBatchPersistence (): boolean { return true }
   protected override requiresActionBatchCleanupBeforeCreateAction (): boolean { return false }
 
-  async readSettings (): Promise<TableSettings> {
-    return this.validateEntity(verifyOne(await this.toDb()<TableSettings>('settings')))
+  async readSettings (trx?: TrxToken): Promise<TableSettings> {
+    return this.validateEntity(verifyOne(await this.toDb(trx)<TableSettings>('settings')))
   }
 
   override async getProvenOrRawTx (txid: string, trx?: TrxToken): Promise<ProvenOrRawTx> {
@@ -1317,7 +1317,7 @@ export class StorageKnex extends StorageProvider implements WalletStorageProvide
    * @param trx
    */
   async verifyReadyForDatabaseAccess (trx?: TrxToken): Promise<DBType> {
-    this._settings ??= await this.readSettings()
+    this._settings ??= await this.readSettings(trx)
 
     // Always run the PRAGMA for SQLite to ensure foreign key constraints are enabled.
     // This is necessary because PRAGMA foreign_keys is a per-connection setting,
diff --git a/packages/wallet/wallet-toolbox/src/storage/__test/readSettingsTrx.test.ts b/packages/wallet/wallet-toolbox/src/storage/__test/readSettingsTrx.test.ts
new file mode 100644
index 000000000..27ed6499f
--- /dev/null
+++ b/packages/wallet/wallet-toolbox/src/storage/__test/readSettingsTrx.test.ts
@@ -0,0 +1,88 @@
+import { knex as makeKnex } from 'knex'
+import { _tu } from '../../../test/utils/TestUtilsWalletStorage'
+import { sdk } from '../../index.client'
+import { StorageKnex } from '../StorageKnex'
+
+/**
+ * Regression test for a self-deadlock on single-connection pools.
+ *
+ * knex forces `{ min: 1, max: 1 }` on the sqlite dialect, so there is exactly one connection.
+ * Any query issued against `this.knex` while a caller's transaction holds that connection can
+ * never be granted: the transaction will not release until the query returns, and the query
+ * cannot run until the transaction releases. It fails with
+ * `KnexTimeoutError: Timeout acquiring a connection... Are you missing a .transacting(trx) call?`
+ *
+ * `verifyReadyForDatabaseAccess(trx)` is on every write path and lazily populates `_settings`.
+ * When that cache is cold and the first access happens inside a transaction, `readSettings`
+ * must run on the caller's transaction rather than the pool, or the whole write deadlocks.
+ *
+ * `acquireConnectionTimeout` is lowered so a regression fails in seconds rather than the
+ * 60s default.
+ */
+describe('readSettings honours a caller-supplied transaction', () => {
+  jest.setTimeout(60000)
+
+  const chain: sdk.Chain = 'test'
+  let dbFile: string
+
+  beforeAll(async () => {
+    // Migrate once so a settings row exists, then drop this storage entirely: the test needs a
+    // StorageKnex whose `_settings` cache is COLD, which `makeAvailable()` would defeat.
+    dbFile = await _tu.newTmpFile('readsettingstrx.sqlite', false, false, false)
+    const seed = new StorageKnex({
+      ...StorageKnex.defaultOptions(),
+      chain,
+      knex: _tu.createLocalSQLite(dbFile)
+    })
+    await seed.dropAllData()
+    await seed.migrate('readSettings trx test', '1'.repeat(64))
+    await seed.destroy()
+  })
+
+  test('verifyReadyForDatabaseAccess does not deadlock when settings are read inside a transaction', async () => {
+    const knex = makeKnex({
+      client: 'better-sqlite3',
+      connection: { filename: dbFile },
+      useNullAsDefault: true,
+      pool: { min: 1, max: 1 },
+      acquireConnectionTimeout: 5000
+    })
+    const storage = new StorageKnex({ ...StorageKnex.defaultOptions(), chain, knex })
+
+    try {
+      // Cold cache: the settings read below is this instance's first database access.
+      expect(storage['_settings']).toBeUndefined()
+
+      const dbtype = await knex.transaction(async trx => {
+        return await storage.verifyReadyForDatabaseAccess(trx as unknown as sdk.TrxToken)
+      })
+
+      expect(dbtype).toBe('SQLite')
+      expect(storage['_settings']).toBeDefined()
+    } finally {
+      await storage.destroy()
+    }
+  })
+
+  test('readSettings accepts a transaction directly', async () => {
+    const knex = makeKnex({
+      client: 'better-sqlite3',
+      connection: { filename: dbFile },
+      useNullAsDefault: true,
+      pool: { min: 1, max: 1 },
+      acquireConnectionTimeout: 5000
+    })
+    const storage = new StorageKnex({ ...StorageKnex.defaultOptions(), chain, knex })
+
+    try {
+      const settings = await knex.transaction(async trx => {
+        return await storage.readSettings(trx as unknown as sdk.TrxToken)
+      })
+
+      expect(settings.chain).toBe(chain)
+      expect(settings.dbtype).toBe('SQLite')
+    } finally {
+      await storage.destroy()
+    }
+  })
+})