Barrierefreiheitsstärkungsgesetz (BFSG) und die betroffenen Bankdienstleistungen
Am 28. Juni 2025 tritt das Barrierefreiheitsstärkungsgesetz (BFSG) in Kraft. Das Kernziel des BFSG ist es, allen Menschen die barrierefreie Teilhabe am Wirtschaftsleben zu ermöglichen. So ist die Teilhabe an digitalen Produkten und Dienstleistungen insbesondere für Menschen mit Behinderung oftmals nur eingeschränkt möglich. Das BFSG verpflichtet alle Wirtschaftsakteure zur Barrierefreiheit bestimmter Dienstleistungen und Produkte. Dies schließt ausdrücklich auch Bankdienstleistungen mit ein, sodass für sämtliche betroffenen Unternehmen der Finanzbranche Handlungsbedarf besteht.
WEITERE INFORMATIONEN
1. Hintergrund
Mit dem BFSG wird die Richtlinie über die Barrierefreiheitsanforderungen für Produkte und Dienstleistungen ((EU) 2019/882) in deutsches Recht umgesetzt. Ergänzend wurde am 15. Juni 2022 die Verordnung zum Barrierefreiheitsstärkungsgesetz (BFSGV) verabschiedet, welche konkrete Anforderungen an die Barrierefreiheit von Produkten und Dienstleistungen regelt.
2. Anforderungen an die Barrierefreiheit
Das BFSG gewährleistet die Barrierefreiheit von Produkten und Dienstleistungen im Interesse der Verbraucher und Nutzer.
Zu den erfassten Produkten gehören u.a. sogenannte Selbstbedienungsterminals, worunter auch Zahlungsterminals und Geldautomaten fallen.
Die Dienstleistungen umfassen Bankdienstleistungen für Verbraucher. Hierzu zählen Verbraucherkreditverträge und Immobiliar-Verbraucherkreditverträge sowie bestimmte, verbraucherbezogene Wertpapierdienstleistungen und Nebendienstleistungen, wovon insbesondere die Portfolio-Verwaltung und die Anlageberatung erfasst sind. Außerdem unterfallen auch Zahlungsdienste nach dem ZAG, mit einem Zahlungskonto verbundene Dienste und E-Geld dem BFSG. Ferner sind auch generell Dienstleistungen im elektronischen Geschäftsverkehr geregelt, die im Hinblick auf den Abschluss eines Verbrauchervertrags erbracht werden. Erfasst ist damit nicht nur der Abschluss eines Verbrauchervertrags über eine Website oder eine App, sondern bereits der vorvertragliche Bereich.Wirtschaftsakteure, die solche Produkte oder Dienstleistungen anbieten, haben grundsätzlich den Pflichten nach dem BFSG nachzukommen, und diese barrierefrei auszugestalten. Ausnahmen und Erleichterungen bestehen nur für Kleinstunternehmen (
The Use of Trusts in Mortgage Loan Financing
Trusts are being used more often for financing mortgage loans, which can be an effective way to optimize asset management and minimize lender risk.
Key Benefits of Using Trusts in Mortgage Loan Financing
Titling Trusts for Mortgage Loans: A Titling Trust holds the legal title to mortgage loans while allowing the beneficial interest in the loans to be financed, including being packaged into securities. This eliminates the need to retitle the loans when beneficial ownership changes, offering significant administrative efficiencies.
Example: A mortgage lender sets up a Titling Trust to hold the legal title to a pool of mortgage loans. As ownership of the loans transfers to investors, the legal title remains with the trust, and only the beneficial interests are given as collateral security for a financing facility or sold as securities, avoiding the need to retitle each loan.
Delaware Statutory Trusts (DSTs): A DST is a popular legal structure in mortgage loan securitization. It is easy to set up, providing flexibility in managing mortgage assets while ensuring asset protection. The DST holds the legal title, while the investors hold the economic beneficial interest.
Example: A mortgage lender forms a DST to pool multiple mortgage loans. The DST can grant a security interest in some or all the beneficial ownership interest in the mortgage loans or issue mortgage-backed securities (MBS), enabling investors to buy shares of the mortgage pool while the legal title remains with the DST.
Series Trusts for Mortgage Loan Pools: A Series Trust allows assets to be divided into Special Units of Beneficial Interest (SUBI). For example, different mortgage loan pools can be allocated into separate SUBIs, each representing a specific pool of loans. This segmentation reduces risk exposure and simplifies asset management. The Delaware statute governing DSTs provides that assets allocated to a SUBI are not subject to the claims of other Trust stakeholders including other SUBI holders.
Example: A lender sets up a Series Trust with multiple SUBIs, each holding a distinct pool of mortgages (e.g., residential, commercial). Each SUBI is independently managed, and its assets are protected from creditors with interests in other mortgage loan pools.
Risks and Considerations
Jurisdictional Limitations: DSTs including Series Trusts may not be recognized in all states, which could impact their use in certain jurisdictions.
Bankruptcy Concerns: While trusts may provide protection from creditors of the beneficial holders, the structure’s bankruptcy risks, including possibly fraudulent conveyance risks, have not been fully tested.
Conclusion
Using trusts, especially DSTs and Series Trusts, offers significant benefits for structuring mortgage loan financings. These vehicles provide flexibility, asset protection, and administrative efficiencies, making them ideal for pooling and financing mortgage loans. However, it’s essential to consider the risks, particularly related to jurisdiction and bankruptcy, when setting up these structures.
ASIC Appeals Full Federal Court’s Finding in Favour of Block Earner: Key Takeaways for Crypto Companies
The crypto-asset industry has undergone unparalleled expansion and growth in recent years, leaving regulators globally grappling with how to keep up and enforce the existing regulatory frameworks. In Australia, the crypto-asset industry has been preparing for the impending regulation of crypto-assets, with the Government consulting on changes to the existing regulatory framework that will create additional licensing requirements for providers of services (such as exchanges and custodians) in respect of crypto-assets (previously discussed in our post). In addition, the Australian Securities & Investments Commission (ASIC) is consulting on changes to its own Information Sheet 225 (INFO 225), which provides guidance on the circumstances in which a crypto-asset related offering may be a financial product.
Against this backdrop, ASIC continues to pursue enforcement action against crypto-asset providers, most recently, seeking special leave from the High Court of Australia (HCA) to appeal the Full Federal Court’s recent decision. On 22 April 2025, the Full Federal Court in ASIC v Web3 Ventures (Block Earner) found in favour of Block Earner, reversing aspects of the primary judgment which had found in favour of ASIC in some respects.
The Full Federal Court’s decision was noteworthy for other cryptocurrency exchange and digital asset providers, given the clarity provided by the court regarding the characteristics of “managed investment schemes”, “facilities through which a person makes a financial investment”, and derivatives.
This decision may have implications for ASIC’s proposed updates to INFO 225, as it had been relying in part on the primary judge’s findings in this case as one of the justifications for needing to update INFO 225.
However, ASIC has now sought special leave to the High Court. If leave to appeal is granted, ASIC may use the appeal as a ‘test case’ for clarifying the definitions of a variety of products in the market. In these circumstances, even if the Full Federal Court’s decision is overturned, Block Earner is likely to seek to ensure that the penalty relief granted in the Federal Court remains.
Background
Block Earner provided two main “products” or “services” known as the “Earner” and “Access” products. The Access product was not considered by the Federal Court to be a financial product. The Earner product allowed customers to “loan” specified cryptocurrency in return for interest paid at a fixed rate. Block Earner was then able to use the loaned crypto assets to generate income by lending the cryptocurrency to third parties. At the end of the loan, users received their AUD calculated by reference to the price of the relevant cryptocurrency plus the fixed rate of return.
Customers were bound by the Terms of Use upon opening an account with Block Earner. Imperatively, under the Terms of Use, Block Earner was required to pay the fixed interest rate to users regardless of the amount of income it earned (if any) in relation to the cryptocurrency which was the subject of the loan.
The Full Federal Court’s Decision (22 April 2025)
The Full Federal Court found that the Earner and Access products were not “financial products” under the Corporations Act for reasons which are detailed below. On this issue, the Full Federal Court overturned the finding of the primary judge.
Managed Investment Schemes
In assessing whether there was a managed investment scheme, the Full Federal Court emphasised the need to assess the Terms of Use and some key provisions in it. In particular, the Terms of Use explicitly stated that the loaned cryptocurrency would not be used to generate a financial benefit for the users.
The Full Federal Court consider that what Block Earner did with the loaned crypto assets was entirely at its own discretion and customers had no right to benefits produced by those activities.
The primary judge had found that, although the Terms of Use did not mention pooling for any common benefit, it was sufficient that Block Earner had represented that contributions would be pooled in order to generate a financial benefit for users.
The FCAFC rejected this notion, instead finding that the clauses within the Terms of Use should be taken literally and objectively, as they were unambiguous.
The court also distinguished this case from cases where the court has gone beyond the terms of the loan agreement; where specific representations are made outside of and contrary to terms of loan and where there were specific commitments to use the funds in particular ways for the benefit of investors. Here, the Block Earner customers had no exposure to the benefits of whatever activities Block Earner undertook once it had borrowed cryptocurrency from those users.
Facility for Making a Financial Investment
The Full Federal Court also held that the Earner product was not a facility for making a financial investment under section 763B of the Corporations Act. The primary judge considered that money was being used to generate revenue to then pay a fixed yield back to customers, and therefore the users were making a financial investment. On the contrary, the Full Federal Court found that Block Earner had used the profit generated for itself, and to benefit itself, rather than ‘for’ the investors. The Full Federal Court again emphasised that users were bound by the Terms of Use which clearly indicated their fixed yield entitlement.
Key Takeaways
The Full Federal gave emphasis to the Terms of Use – and their literal interpretation – as opposed to what ASIC considered the terms to have “conveyed”.
Terms or other representations should be unambiguous and explicit, and not overly long or complex. This ensures that the terms are unable to be construed in any other way than how the business intends.
The legal relationship between the business and its customers should be clearly defined.
Conclusion
Further developments at the High Court are being watched closely, given their potential impact on digital asset businesses.
In the meantime, the Full Federal Court’s judgment provides clarity on the characteristics of managed investment schemes, facilities through which a person makes a financial investment and derivatives.
There may be implications for Information Sheet 225 as a result of the judgment, but this remains uncertain ahead of ASIC’s special leave request. We will provide further updates if there are any developments.
Investment Management Client Alert June 2025
ESMA Publishes Final Report on the Preparation of Securities Prospectuses
On 12 June 2025, the European Securities and Markets Authority (ESMA) published its final report with regulatory technical standards (RTS) for the preparation of securities prospectuses. This contains a proposed amendment to Delegated Regulation (EU) 2019/980, which contains the schedules for the content of securities prospectuses. This is intended to further elaborate and implement the amendments to the Prospectus Regulation, in particular due to the introduction of new prospectus types with the Listing Act adopted by the European Parliament on 14 November 2024.
The draft amendment to Delegated Regulation (EU) 2019/980 for European green bonds and nonequity securities that are advertised as considering Environmental, Social, and Governance (ESG) factors or pursuing ESG objectives provides for significant changes to the prospectus content. This applies in particular to information on the EU Taxonomy Regulation and on market standards or ESG labels. In addition, issuers of nonequity securities that are advertised as considering ESG factors or pursuing ESG objectives and that are based on an underlying asset (structured securities) must provide information on the extent to which this underlying asset is material for the assessment of the ESG factors or ESG objectives.
The European Commission now has three months to decide whether it will implement the final draft amendment to Delegated Regulation (EU) 2019/980.
ESMA Publishes Technical Advice on Harmonization of Prospectus Liability
On 12 June 2025, ESMA published technical advice on the further harmonization of civil liability in relation to securities prospectuses. A mandate from ESMA in this regard is provided for in the Prospectus Regulation following amendment by the Listing Act. To date, civil liability for prospectuses has largely been governed by the national laws of the member states. However, under the Prospectus Regulation, member states must establish a prospectus liability regime. ESMA had previously examined the liability regimes in the member states for its technical advice.
Like the market participants it consulted, ESMA does not see any fundamental need for reform or harmonization with regard to the prospectus liability rules. However, ESMA has identified two areas that it believes are worthy of discussion. Some prospectus liability regimes provide for an exemption (safe harbor rule) for forecasts in prospectuses, as these are generally inherently uncertain. ESMA proposes certain criteria and restrictions in the event that such a safe harbor rule should also be included in the prospectus liability provision (Article 11) of the Prospectus Regulation. ESMA also points out difficulties in determining the applicable national law in relation to prospectus liability claims. This is determined by the conflict rules of private international law (e.g., the Rome I and Rome II Regulations). In ESMA’s view, specific regulations for prospectus liability claims could be helpful here.
ESMA will publish its final report next.
BaFin’s Consultation on the Withdrawal of GwG Exemptions
On 6 June 2025, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin) started a hearing for a general ruling regarding the withdrawal of exemptions from the provisions of the German Anti-Money Laundering Act (Geldwäschegesetz, or GwG).
Under the version of the GwG in force until 20 August 2008, obliged entities could be exempted from the provisions of the GwG. BaFin and its predecessor authority had made use of this and issued corresponding exemption decisions, some of which are still valid today.
In light of the new EU Anti-Money Laundering Regulation, which will in general apply from 10 July 2025 and that also governs exemptions from the GwG obligations, BaFin no longer sees any scope for the continuation of the previously granted exemptions and plans to withdraw the exemptions by way of a general ruling by 10 July 2025.
ESMA Publishes Final Report on Active Account Requirement Under EMIR
On 19 June 2025, ESMA published its final report with RTS regarding the obligation to use an active account for OTC derivatives.
Financial counterparties and nonfinancial counterparties that are subject to the clearing obligation and exceed the clearing threshold for certain derivative contracts must maintain an active account with an authorized central counterparty for these derivative contracts in accordance with the European Market Infrastructure Regulation (EMIR) and clear a certain number of transactions on this account.
ESMA’s regulatory technical standards set out further requirements for the functionality and operation of active accounts, the conditions for stress tests, and the details of reporting in a draft delegated regulation. The requirements depend on the type of derivative and whether certain thresholds are reached.
The European Commission now has three months to decide on the adoption of the proposed Delegated Regulation.
ESMA Takes Action Against the Promotion of Unauthorized Financial Services
On 28 May 2025, ESMA sent a separate letter to the major social media providers asking them to take action against the promotion of unauthorized financial services. Accordingly, social media providers should take proactive steps to prevent the promotion of unauthorized financial services in the European Union. In particular, they should verify whether the firms that wish to promote a financial service on their platform have been authorized to provide investment services in the European Union or are acting on behalf of an authorized firm.
Wire Transfer Fraud: Prevention and Response Strategies After a Data Breach [Podcast]
In this podcast, Harris Freier (shareholder, Morristown) and Lauren Watson (associate, Raleigh) discuss the growing issue of misdirected wire transfers tied to data breaches. Lauren and Harris begin by addressing social engineering and phishing, and how these types of business email compromise scams by cybercriminals occur. The speakers also review the importance of having an incident response plan, the legal obligations for breach notifications, and strategies for recovering misdirected funds, emphasizing the need for swift action and thorough verification processes to prevent future incidents.
Texas Establishes Strategic Bitcoin Reserve
On June 20, 2025, Texas Governor Greg Abbott signed into law SB 21, an act establishing a Texas Strategic Bitcoin Reserve. The act is immediately in effect.
In adopting the new legislation, the Texas legislature found that bitcoin and other cryptocurrencies are assets with strategic potential for enhancing the state’s financial resilience. Bitcoin and other cryptocurrencies can serve as a hedge against inflation and economic volatility. Establishment of a strategic bitcoin reserve serves the public purpose of providing enhanced financial security to Texas residents. The Texas Strategic Bitcoin Reserve will exist outside the state treasury under the custody of the Comptroller of Public Accounts.
The Comptroller is authorized to manage the Reserve, which will include bitcoin or any other cryptocurrency with an average market capitalization of at least $500 billion over the most recent 24-month period. The Reserve will be funded through legislative appropriations, open market purchases, forks, or airdrops to the state’s cryptocurrency addresses. The statute also establishes a five-person advisory committee to advise the Comptroller regarding administration and management of the Reserve. The Comptroller must publish a biennial report regarding the value of the fund and actions taken by the Comptroller to administer and manage the Reserve during the preceding state fiscal biennium.
Texas Targets Proxy Advice Based on Nonfinancial Factors With SB 2337
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 2337 (SB 2337), which imposes new regulations on proxy advisory firms — such as ISS and Glass Lewis — when providing voting recommendations and other proxy advisory services concerning Texas public companies. The new law, which takes effect on September 1, 2025, applies to proxy advisory services involving any public company that is incorporated in Texas, has its principal place of business in Texas, or has proposed redomiciling in Texas. SB 2337 requires proxy advisors to provide detailed disclosures when their recommendations are based, in whole or in part, on nonfinancial factors — including environmental, social or governance (ESG) principles or diversity, equity and inclusion (DEI) considerations — or when they diverge from management’s recommendation or provide conflicting advice across clients. Any violation of the new law constitutes a deceptive trade practice under the Texas Business & Commerce Code and is actionable by the company that is the subject of the recommendation, any of its shareholders, advisory clients, and the Texas Attorney General.
Scope and Applicability of SB 2337
SB 2337 will apply to “proxy advisory services” provided in connection with or in relation to any public company that:
is organized or created under the laws of Texas;
has its principal place of business in Texas; or
has made a proposal in its proxy statement to redomicile in Texas.
SB 2337 defines “proxy advisory services” as:
advice or a recommendation on how to vote on a shareholder proposal or company proposal;
proxy statement research and analysis regarding a shareholder proposal or company proposal;
a rating or research regarding corporate governance; or
development of proxy voting recommendations or policies, including establishing default recommendations or policies.
Disclosure Triggers for Nonfinancial Voting Recommendations
Under SB 2337, a proxy advisory service is subject to enhanced disclosure requirements if it:
is wholly or partly based on or, or otherwise takes into account, one or more nonfinancial factors, including those based on environmental, social or governance (ESG) principles, diversity, equity or inclusion (DEI), social credit or sustainability factors or scores or membership in or commitments to groups that wholly or partly bases its evaluation on non-financial factors;
involves providing a voting recommendation with respect to a shareholder proposal that (A) is inconsistent with the voting recommendation of the board of directors or a board committee composed of a majority of independent directors and (B) does not include a written economic analysis of the financial impact on shareholders of the proposal;
is not based solely on financial factors and subordinates the financial interests of shareholders to other objectives, including sacrificing investment returns or undertaking additional investment risk to promote nonfinancial factors; or
advises against a company proposal to elect a director unless the proxy advisor affirmatively states that the proxy advisory service solely considered the financial interest of the shareholders in making such advice.
Mandatory Disclosure Obligations for Proxy Advisors
If a proxy advisor provides a proxy advisory service that meets any of the foregoing qualifications, the proxy advisor must:
disclose to each shareholder (or entity acting on behalf of a shareholder receiving the service) a conspicuous statement that the service is not being provided solely in the financial interest of the company’s shareholders and explain, with particularity, the basis of the proxy advisor’s advice concerning each recommendation and that the advice subordinates the financial interests of shareholders to other objectives, including sacrificing investment returns or undertaking additional investment risk to promote one or more nonfinancial factors;
immediately provide a copy of the disclosure to the company that is the subject of the recommendation; and
include a conspicuous disclosure on the home or front page of the proxy advisor’s website that its proxy advisory services include advice and recommendations that are not based solely on the financial interest of shareholders.
Notice Requirements for Conflicting Voting Recommendations
SB 2337 also includes enhanced notice requirements for a proxy advisor that recommends that one or more clients vote on a proposal in opposition to the recommendation of the company’s management or that one or more clients who have not expressly requested services for a nonfinancial purpose vote differently from one or more other clients on a proposal or director nominee. If so, the proxy advisor is required to:
if applicable, comply with the disclosure requirements for proxy advisory services not solely based on financial interests (as described above);
provide written notice to each shareholder receiving the recommendation, the company that is the subject of the recommendation and the Texas Attorney General; and
disclose which of the conflicting advice or recommendations is provided solely in the financial interest of the shareholders and supported by any specific financial analysis performed or relied on by the advisor.
Enforcement and Remedies
SB 2337 provides that any violation of its provisions is a deceptive trade practice under the Texas Business & Commerce Code, and names the recipient of the proxy advisory services, the company that is the subject of the proxy advisory services and any of the company’s shareholders as affected parties that are entitled to bring a claim for injunctive relief. The bill also authorizes the Texas Attorney General to intervene in such a claim. Additionally, the consumer protection division of the Attorney General’s office may pursue civil penalties for violations of SB 2337.
Legislative Context
SB 2337 is the latest in a series of pro-business corporate governance reforms, which we discussed in our two previous alerts concerning Senate Bills 29 and 1057 and Senate Bill 2411, aimed at positioning Texas as a jurisdiction of choice for public companies. By requiring proxy advisory firms to disclose when their voting recommendations are based on ESG, DEI or other nonfinancial factors, the Texas Legislature has reaffirmed its commitment to a business-first approach that prioritizes transparency and shareholder financial interests.
DOJ’s New FCPA Investigations and Enforcement Guidelines: How Organizations Need to Respond
The Deputy Attorney General of the U.S. Department of Justice Office recently issued new guidelines for investigations and enforcement actions of the Foreign Corrupt Practices Act. (FCPA). These new guidelines come as a first follow up to President Trump’s Executive Order from February 10, 2025, effectively pausing most FCPA investigations and enforcement. As discussed below, DOJ’s updated guidelines effectively “unpauses” FCPA enforcement with a highlighted emphasis on the current administration’s continuing “America First Priorities.”
More specifically, the June 9 DOJ Memorandum sets forth a “non-exhaustive” list of factors for DOJ to evaluate when considering whether to pursue FCPA investigations and enforcement. DOJ emphasizes two goals, “(1) limiting undue burdens on American companies that operate abroad and (2) targeting enforcement actions against conduct that directly undermines U.S. national interests.” New FCPA investigations and enforcements must be authorized by a senior DOJ official and should only be pursued after consideration of the following factors:
Total elimination of cartels and transnational criminal organizations – focusing on alleged conduct that is associated with or involves laundering money for a cartel or transnational criminal organization (TCO) or is linked to state-owned entities or foreign officials who have received bribes from cartels or TCOs.
Safeguarding fair opportunities for U.S. companies – prioritizing the investigation and prosecution of foreign bribery that impacts “specific and identifiable” U.S. entities or individuals (e.g., organizations that engage in bribery that “skew[s] markets and disadvantage[s] law-abiding U.S. companies”).
Advancing U.S. national security – focusing on “threats to U.S. national security resulting from the bribery of corrupt foreign officials involving key infrastructure or assets.” Key sectors include defense, software, artificial intelligence, critical minerals and deepwater infrastructure.
Prioritizing investigations of serious misconduct – emphasizing investigations of alleged conduct “that bears strong indicia of corrupt intent tied to particular individuals.”
Principles of Federal Prosecution – requiring consideration of multiple factors, including the nature and seriousness of the offense and any deterrent effect of prosecution.
Prosecutorial discretion – noting that DOJ will implement prosecutorial discretion in investigating, prosecuting, and continuing actions based on a totality of the circumstances.
Matthew R. Galeotti, Head of DOJ’s Criminal Division, recently spoke about the new FCPA enforcement guidelines, stating that while “[n]o one factor is necessary or dispositive,” the focus of these guidelines is “vindication of U.S. interests,” and that DOJ will be prioritizing misconduct that “genuinely impacts the United States or American people.”
After a lull in enforcement actions following President Trump’s February Executive Order, the new guidelines demonstrate that FCPA enforcement is alive and well under the current administration. While these new guidelines, along with DOJ and the Trump administration’s concurrent initiatives, emphasize a focus on individuals, non-U.S. entities, and specific business lines (e.g., those that have a risk of interaction with cartels and TCOs), the impact on all organizations will be broad.
The new FCPA enforcement guidelines underscore the importance for organizations to maintain a resilient, risk-based compliance program that implements a consistent and vigilant stance against corruption and bribery that will withstand broad prosecutor discretion and the possibility of policy changes under the current and future administrations. DOJ clarified in its new guidance that it will focus on serious misconduct, rather than “de minimis” violations like small gifts or modest perks (although those may be used in books-and-records charges by the SEC). While gifts, travel expenses and entertainment remain important in an effective compliance program, the new DOJ guidance emphasizes the need for companies to focus their compliance efforts on (1) areas where business decision are made, including third-party representatives and agents, joint ventures, government tenders and public-private partnerships and on (2) business activities in emerging and high-risk corruption regions such as Brazil, Mexico, India and China.
The following are additional key takeaways that organizations should consider in reviewing and enhancing their compliance programs to address the new FCPA enforcement priorities:
DOJ’s Prioritization of Investigating and Prosecuting Individuals
Impact: The impact to organizations that may come as the result of DOJ’s focus on individual conduct can be broad and significant. From personnel implications to reexamination and even restatement of financial information prepared or certified by specific individuals, organizations can be significantly impacted by individual misconduct and investigation and prosecution of individuals within their businesses.
Compliance Review: In an effort to prevent such misconduct, businesses should require regular and thorough training on FCPA compliance across their organizations — with a focus on the subjects at the forefront of DOJ’s prohibition of conduct that “directly undermines U.S. national interests.” Any impression that DOJ will not enforce the FCPA or that the FCPA is no longer applicable to specific industries due to DOJ’s updated focus areas should be eliminated throughout the organization, especially among personnel outside the United States.
DOJ’s Focus on “America First” Initiatives
Impact: International organizations with a U.S. nexus may now be held to higher levels of scrutiny under the FCPA than their U.S. counterparts. DOJ has vowed to “vindicate” U.S. interests through its enforcement of the FCPA, and with this focus, non-U.S. entities may see increased FCPA enforcement for their conduct that is viewed as harm to U.S.-based businesses.
Compliance Review: Non-U.S. entities should conduct a focused risk assessment and review of policies to determine whether its business could be perceived as negatively implicating U.S. business interests. For instance, DOJ is likely to focus on alleged corruption by international organizations competing with U.S-based companies. Moreover, DOJ is encouraging whistleblower reports, which may be utilized by companies to initiate potential investigations of their competitors. Organizations competing against U.S. companies for business outside the U.S should review and update as needed their compliance procedures and conduct additional training for employees and agents to guard against potential violations. Further, because DOJ has made clear it will use the FCPA to further U.S. interests, it is important that organizations and their leadership understand how national security interest connect with anti-corruption compliance. Organizations should have increased insights into its political contributions, lobbying efforts and dealings with foreign government-owned companies.
DOJ’s Emphasis on Cooperation and Self-Reporting
Impact: Under the new policy updates, failure by an organization to timely report and cooperate with DOJ’s investigation of individuals can have negative and potentially severe implications on DOJ’s charging decisions. Organizations should also be mindful that they could be tasked with cooperating with DOJ’s review of competitors and foreign contacts accused of FCPA violations. As Bracewell recently reported, DOJ continues to stress the importance of self-reporting by entities that have discovered violations within or outside of their organizations and DOJ has set out powerful incentives for companies to do so.
Compliance Review: DOJ has emphasized that “significant benefits” will be available to businesses that participate in the fight against corruption. And in contrast, “those who do not come forward despite all the benefits available,” will be “aggressively – yet fairly” prosecuted. Therefore, a robust compliance program that is designed to prevent and detect potential violations of law will not only include policies that forbid specific conduct in addition to broad statements against “violations of law,” but also, in the event that there are perpetrators, will allow for swift identification, investigation and elimination of violations and aid in self-reporting and cooperation efforts. Organizations should encourage a “speak up” culture with easily accessible and anonymous reporting options for employees as well as individuals outside of the organization. Stakeholders should be encouraged to raise concerns and complaints for the organization to review and investigate, and organizations should have effective internal investigation procedures in place to ensure efficient and thorough review of complaints. Moreover, companies should not rely only on manual reviews and internal whistleblowers to detect potential violations. Organizations should consider investing in right-sized automated monitoring that can offer proactive, data-driven detection to allow the organization to identify misconduct early and to act quicker.
DOJ’s Focus on Cartels and TCOs
Impact: With DOJ putting the world on notice of its focus on cartels and TCOs and tying cartel activity directly to FCPA enforcement, businesses will need to be more cognizant of their third-party intermediaries, agents, vendors, joint venturers and other third parties involved in transactions and avoid activity with these types of organizations, even indirectly.
Compliance Review: Stringent due diligence, policies and training on identification, verification and risk assessment of third parties will be paramount to ensure effective scrutiny of business partners. Organizations should ensure that “Know Your Customer” (as well as clients and counterparties) standards are updated and properly implemented to ensure proper continued monitoring and verification of third parties. Organizations should also update their risk assessment to identify regions in which cartels and TCOs are known to operate, such as Mexico and Colombia, and consider strengthening compliance procedures and conducting targeting training to reduce the risk in doing business in high-risk areas.
Reaction of Auditors, Banks and Financial Advisors
Impact: Auditors, banks and financial advisors may have a heightened interest in review of the books, records and internal accounting controls of businesses because of a concern of potential decreased anti-corruption compliance efforts by companies after mixed messaging on DOJ FCPA enforcement. It is likely that auditors and other financial advisors will increase scrutiny of anti-corruption compliance and the internal review or investigation of any potential violations of company policies or applicable laws.
Compliance Review: It is imperative that all levels of employees are trained and equipped to identify the impact that bribery and corruption can have on an organization’s internal records. Executives must additionally be adequately informed on their organization’s books and records and controls over financial reporting to make accurate representations in connection with the organization’s financial statements. With DOJ’s renewed focus on individual behavior, executives, as well as Audit Committee members, and other board members and senior officials must also be familiar with their obligations to certify accurate financial records. Further, board members and management should take steps to have an adequate understanding of the company’s key compliance programs and how the company has identified and addressed any anti-corruption compliance gaps and/or potential violations of law. Companies should consider refreshing policies and training to ensure each of these key groups understands their roles and responsibilities.
Anti-Corruption Actions Outside of the United States
Impact: With a drop in FCPA investigations and enforcement actions in the United States following President Trump’s pause on FCPA enforcement, other countries have increased their review of bribery and corruption. As Bracewell discussed in a previous alert, three countries established the International Anti-Corruption Prosecutorial Taskforce focused on anti-corruption initiatives earlier this year, and other countries and law enforcement agencies may follow suit. Similarly, while DOJ has historically been the primary enforcer of the FCPA, the SEC has stated that “FCPA enforcement continues to be a high priority area for the SEC’s enforcement program.” Thus, businesses are still at risk of facing consequences from regulators at home or abroad.
Compliance Review: In addition to the FCPA, organizations should review their compliance policies and procedures to ensure that they do not conflict with anti-corruption rules and regulations from other areas of the world and continue to be mindful of additional taskforces that may arise as a result as DOJ endeavors to address President Trump’s directives.
In response to these policy updates, and as part of an effective compliance program, organizations should consider steps to strengthen their compliance programs to prevent and detect misconduct, including corruption and bribery. Strong compliance programs that effectively prohibit and identify potential violations are designed around a focus on risk assessments, tone and culture, due diligence, regular training, effective policies and procedures, and continuous monitoring and improvement. Not only will this allow organizations to root-out misconduct, but it will also allow them to capitalize on the self-disclosure benefits emphasized by DOJ if violations are prevented.
Maine and Oregon Join List of States Prohibiting the Reporting of Medical Debt on Consumer Reports
In June, Maine and Oregon joined a growing list of states that now prohibit the reporting of medical debt to a consumer reporting agency.
On June 9, 2025, the governor of Maine signed into law LD558, which amends the Maine Fair Credit Reporting Act to prohibit medical creditors, debt collectors and debt buyers from reporting a consumer’s medical debt to a consumer reporting agency. Under the Maine law, a “medical creditor” is defined as “an entity that provides health care services and to whom a consumer incurs medical debt or an entity that provided health care services to a consumer and to whom the consumer previously owed medical debt if the medical debt has been purchased by one or more debt buyers.” Additionally, the Maine law forbids consumer reporting agencies from reporting medical debt on consumer reports. Consumers whose medical debt is reported in violation of the new amendments can seek civil remedies against the medical creditor, debt collector, debt buyer, or consumer reporting agency that reported the medical debt pursuant to the Maine Fair Credit Reporting Act for actual damages, attorneys’ fees and costs, and either treble damages or statutory damages depending on whether the violation was willful or negligent.
On June 17, 2025, the governor of Oregon signed into law SB0605, amending current Oregon statute 646A.677 to ban the reporting of medical debt owed by Oregon residents to any consumer reporting agency. The Oregon law is more expansive than the new Maine law in that it prohibits any “person” from “report[ing] to a consumer reporting agency the amount or existence of any medical debt” that a resident of Oregon “owes or is alleged to owe.” The law applies to medical debt that is owed to health care providers, as well as owed to credit cards issued for the purpose of covering medical expenses. The new law also states that consumer reporting agencies “may not include in a consumer report an item that the consumer reporting agency knows or reasonably should know is medical debt.”
The new Oregon law allows individuals to bring a private civil action pursuant to Oregon’s Unlawful Trade Practices Act against any violator of the statute. In a civil action, “in addition to any other relief a court may grant, the court may declare the medical debt void and uncollectible.”
Maine and Oregon join New York, California, Illinois, New Jersey, Minnesota, Virginia, Colorado, Rhode Island, and Vermont in enacting laws that prohibit or restrict what information regarding medical debt, if any, can be reported to consumer reporting agencies. The increase in states enacting consumer protection laws targeting medical debt is unsurprising in light of the Consumer Financial Protection Bureau’s (“CFPB”) failure to implement a federal rule on this topic.
As previously reported, in January 2025, the CFPB passed a federal rule banning the reporting of individuals’ medical debt on consumer credit reports that was set to become effective in March 2025. The CFPB, however, pursuant to a January 20, 2025 Executive Order, adjourned the implementation of the rule. Recently, the CFPB sided with creditor industry groups that filed lawsuits to halt the federal rule and asked a federal court to allow it to withdraw the federal rule banning reporting of consumer medical debt.
Health care providers delivering services to residents of Maine or Oregon, as well as debt collectors and debt buyers that perform services in these states, should ensure that their current policies regarding the reporting of consumer medical debt align with the new laws. Given the increasing number of jurisdictions enacting laws that ban the reporting of consumer medical debt and the potential for some of those laws to prevent the collection of consumer medical debts that are reported to a consumer reporting agency and/or expose the reporter of the medical debt to civil litigation and a potential monetary judgment against it, entities providing health care services and/or engaging in the collection of consumer medical debt need to remain abreast of the consumer protection laws in the states in which they provide services and adjust their practices accordingly.
One Big Beautiful Bill Act – Senate Proposal Would Limit Applicability of House’s 3.5% Remittance Tax on Fund Transfers Abroad
On June 16, 2025, the Senate Finance Committee released its own version (Senate Proposal) of the tax provisions of H.R. 1, entitled the “One Big Beautiful Bill Act” (Bill) which the U.S. House of Representatives passed on May 22, 2025. The full U.S. Senate is expected to debate the Senate Proposal in the days ahead, where additional changes may be made.
The Bill passed by the House includes a proposal to impose a 3.5% excise tax on “remittance transfers” after Dec. 31, 2025 (Remittance Tax), subject to certain exceptions for transfers made by U.S. citizens and nationals.
Key Exceptions in the Senate Proposal
Presumably addressing significant concerns raised by U.S. financial institutions and business associations, the Senate Proposal significantly limits the applicability of the Remittance Tax by providing an exception for remittance transfers made through accounts held by certain financial institutions subject to the Bank Secrecy Act (and that are therefore subject to anti-money laundering (AML) recordkeeping and reporting requirements). More specifically, funds withdrawn from an account held in or by the following types of financial institutions are excepted from the Remittance Tax: (i) an insured bank; (ii) a commercial bank or trust company; (iii) a private banker; (iv) an agency or branch of a foreign bank in the United States; (v) a credit union; (vi) a broker or dealer registered with the Securities and Exchange Commission; and (vii) a broker or dealer in securities or commodities. The Senate Proposal also makes an exception for remittance transfers that are funded with a debit or credit card issued in the United States. In parallel, the Senate Proposal affirmatively applies the Remittance Tax to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar instrument (as determined by the Secretary of the Treasury).
The Remittance Tax, if enacted as proposed in the Senate Proposal, would be imposed on the sender at a rate of 3.5% on certain fund remittance transfers conducted primarily for personal, family, or household purposes after Dec. 31, 2025, to accounts or recipients outside the United States, which are not made through accounts held in or by the expressly enumerated financial institutions or funded with a debit card or a credit card issued in the United States. Unlike the House proposal, the Remittance Tax under the Senate Proposal would also apply to U.S. citizens and nationals. When applicable, the Remittance Tax will be imposed on the sender, but the remittance transfer provider will be required to collect and remit the tax to the IRS on a quarterly basis and will have secondary liability for any tax that is not paid at the time the transfer is made. The proposed provisions also provide for a refundable tax credit for any Remittance Tax paid by or on behalf of U.S. citizens and nationals, green card holders, and other holders of work-eligible visas who are issued social-security numbers. The remittance transfer providers that are not excluded under the Senate Proposal would also be required to file returns with the Secretary of Treasury detailing the amount of Remittance Tax collected and paid by the remittance transfer provider, as well as the name, address, and social-security number of any senders who certified an intent to claim the remittance tax credit.
Notably, the Senate Proposal does not carve out an express exception for Money Services Businesses (MSBs), registered investment advisors, or corporations organized under Section 25A of the Federal Reserve Act (i.e., Edge corporations).1 As a result, such companies (and others not expressly excepted from the Remittance Tax requirements) should consider assessing whether the funds being transferred are “withdrawn from an account held in or by” one of the enumerated financial institutions or funded by a debit or credit card issued in the United States to fall under an exception.
Financial institutions should monitor the upcoming Senate debate and the process for resolving differences between the two bills, and assess their current procedures for handling cross-border remittances to determine what adjustments need to be made to collect the required information and tax in order to comply with the Remittance Tax requirements.
1 While not expressly carved out, there is an argument that Edge corporations may be subject to the exception under the “commercial bank” category. Nonetheless, obtaining clarity on this point as the Bill evolves will be critical for the banking industry. Additionally, it is unclear whether virtual currency transfers are subject to the Remittance Tax. The Senate Proposal, like the House Bill, incorporates definitions from the Electronic Funds Transfer Act (15 U.S.C. §§ 1693 et seq.) (EFTA), specifically regarding “remittance transfer,” “remittance transfer provider,” and “sender.” A “remittance transfer” by definition requires there be an electronic transfer of “funds.” The term “funds” is not defined under the EFTA or Regulation E (12 C.F.R. Part 1005), although the CFPB, in one of the final acts under the Biden administration, proposed an interpretive rule to expand the “funds” definition under the EFTA to include stablecoins and “other similarly-situated fungible assets that either operate as a medium of exchange or as a means of paying for goods or services.” 90 Fed. Reg. 3723 at 3726. Nevertheless, absent a final effective interpretive rule or other established definition of “funds” to capture virtual currency products, the Remittance Tax arguably would not apply to virtual currency and crypto-related asset transfers.
Christina Guerrero-Gomez contributed to this article
Blockchain+ Bi-Weekly; Highlights of the Last Two Weeks in Web3 Law: June 20, 2025
It was a busy two weeks in Congress, as key pieces of digital asset legislation move forward in both the House and Senate. While the stablecoin bill in the Senate looks like it may pass quickly, the overarching market structure bill in the House has been hotly debated and appears to lack bipartisan consensus. In other news, various crypto companies are looking to go public after a major stablecoin issuer went public with great success recently, and the SEC is clearing the way for expected upcoming formal rulemaking on the application of securities laws to digital assets.
These developments and a few other brief notes are discussed below.
GENIUS Act Vote in Senate: June 11, 2025
Background: In the Senate, there was a 68-30 vote to invoke cloture on the GENIUS Act, setting the stablecoin bill up for final passage this week. President Trump has put out a statement saying he would sign the bill into law in its current form if it hits his desk. It is expected that by the time of publication of this latest Bi-Weekly update, the GENIUS Act will have passed the Senate, but the bill will still need to go to the House, and then the Senate again if the House makes any changes, before it can reach the President’s desk. The current House stablecoin legislation differs from the GENIUS Act in various ways, including issuers being regulated at both the state and federal levels and how foreign issuers are regulated.
Analysis: The end of week vote to invoke cloture was a move by Senate Majority Leader Thune to end the effort to pass the bill via “regular order” which opens floor proceedings for submission and debate on various amendment proposals. This means the bill is now moving forward with just the changes negotiated with Democrats which lead to 16 Democrats supporting the GENIUS Act in a procedural vote on the Senate floor last month. The list of Senators who voted in favor of cloture is worth monitoring, with Senate Minority Leader Schumer voting against. This stablecoin bill cloture vote came the same week as Treasury Secretary Bessent testified to the Senate Appropriations committee that the Treasury Department is estimating the U.S. Dollar denominated stablecoin market to grow to $2 trillion by the end of 2028.
House Financial Services and Agriculture Committees Markup CLARITY Act : June 10, 2025
Background: The House Financial Services and Agriculture committees held separate hearings to mark up the CLARITY Act with the Financial Services committee focused on the SEC related-elements, while the Agriculture committee worked through the CFTC-related provisions. The biggest change was the protection for crypto developers, wallet makers, and infrastructure providers (previously a separate bill dubbed the Blockchain Regulatory Certainty Act introduced by Representatives Emmer and Torres). The bill passed through the Agriculture committee on an overwhelming 47-6 vote. The vote in the Financial Services committee was a closer 32-19.
Analysis: The Agriculture committee’s overwhelmingly bipartisan vote came right around the start of the Financial Services committee markup, and this fact was harped on regularly by bill proponents as a reflection of bipartisan bill support. The Financial Services markup process was choppier, going well into the night with roughly 40 amendments offered without any expectation of being approved. The current draft would give the CFTC spot market authority over most digital assets, but there is seemingly a push by opponents to give the SEC more power in this area.
House Financial Services Committee Holds Crypto Hearing: June 4, 2025
Background: The House Financial Services Committee held a hearing entitled American Innovation and the Future of Digital Assets: From Blueprint to a Functional Framework to discuss issues related to digital asset regulation. Witnesses included the Chief Legal Officer for Uniswap Labs, Katherine Minarik, and former CFTC Chair Rostin Behnam. Proponents of passing digital asset legislation aimed at encouraging its development in the United States emphasized in the hearing the need for legislative certainty to protect consumers and ensure companies are not leaving the United States to pursue building products and services with blockchain technologies. Opponents cited concerns with the President’s conflicts of interest and argued digital assets should change to meet existing laws rather than making new laws for digital assets.
Analysis: This was just a warmup to the CLARITY Act markup. This hearing started with Ranking Member Waters stating in reference to the CLARITY Act “the only thing clear about this bill is we need to start over.” Republicans pulled a surprise attendance at minority day as well, where typically only the minority party members would attend. The House Agriculture Committee also held a digital asset hearing, but that was less dramatic. There is still much to be done in the regulatory environment, and further changes can be expected including whether what has been dubbed the “DeFi Purity Test” provisions by some is included in whatever the final bill is.
Briefly Noted:
401K Updates: Our last Bi-Weekly update highlighted recent changes from the Department of Labor related to inclusion of crypto in 401(k) plans. Our employment law colleagues here at Polsinelli wrote a larger update on this and how it affects plan managers worth reading here.
Joint Statement on Validator and Developer Protections: The largest advocacy organizations in the digital asset industry put out a joint statement encouraging the Blockchain Regulatory Certainty Act (a bipartisan bill introduced by Representatives Emmer and Torres) be added to the CLARITY Act. It looks like it worked as it was added to the new bill language, so good work all around on this.
SEC Roundtable on DeFi: The SEC roundtable discussion on the agency’s potential role in decentralized finance is worth going back and watching if you did not catch it live. The intro from Chair Atkins was great, as were the additions from Michael Mosier on privacy and data communications systems.
CFTC Chair Nomination Hearing: Brian Quintenz had his confirmation hearing on June 10. It is widely expected he will be confirmed, but the fact that he will likely be the sole CFTC Commissioner shortly after confirmation (if he is confirmed) is an interesting wrinkle.
Samurai Motion to Dismiss: The developers behind bitcoin privacy tool Samourai Wallet moved to dismiss the DOJ’s unlicensed money transmitter related charges last week. “[The DOJ’s legal theory is] akin to charging an encrypted messaging app developer with conspiracy because it may know that some customers use the app to communicate about financial crimes. Or charging a burner phone manufacturer because it may know some customers use the phones to facilitate drug crimes.” DeFi Education Fund and Blockchain Association also wrote an amicus advocating for dismissal (even though the judge took a rare route and denied requests for amicus submissions).
Crypto Company IPOs: Circle’s shares opened at $69.50 on the New York Stock Exchange after its IPO priced at $31. It joins Coinbase as one of the limited publicly traded crypto companies. Gemini has also apparently has confidentially filed for an IPO with the SEC as did digital asset exchange Bullish. There are also expectations for other businesses in the space to explore going public in the near future.
SOL Spot ETF Filings: All the major players filed their S-1 prospectuses with the SEC to try to be in the first batch of SOL ETFs which everybody expects to happen. The big issue remains staking, which these vehicles need to be able to do to be competitive with spot buying on the open market.
SEC Withdraws Rule Proposals: The SEC has formally withdrawn most of the rule proposals issued under the prior administration, including several proposed rules which would have had significant implications on DeFi and crypto custody. It is a rare move to see rule proposals formally retracted rather than fading silently into the background, so this signifies an attempt to create a “clean slate” for upcoming expected rule proposals under Chair Atkins.
Coinbase State of Crypto Report: The Coinbase yearly State of Crypto research is out. Biggest findings are in the cover photo, including that 60% of Fortune 500 executives surveyed said their companies are currently working on blockchain initiatives. They also did a livestream with various big names in crypto and policy going through the results and plans for the upcoming year.
Conclusion:
As the first half of 2025 wraps up, the digital asset policy landscape is entering a critical phase. Stablecoin legislation appears poised for Senate passage, while the broader market structure bill continues to spark heated debate in the House. Meanwhile, key regulatory and enforcement developments—including the SEC’s rule withdrawals, the DOJ’s evolving theories on developer liability, and growing IPO activity—suggest a transitional moment for Web3 in the United States. With bipartisan momentum behind certain reforms and a growing chorus pushing for clarity, the next few months will be essential in shaping the legal infrastructure for blockchain and digital asset innovation.
Senate Passes GENIUS Act: Landmark Federal Stablecoin Bill Advances to House
The US Senate has passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) by a vote of 68-30, a significant development for cryptocurrency regulation in the United States. This passage follows the recent advancement of the Digital Asset Market Clarity (CLARITY) Act, a crypto market structure bill, through the House Financial Services and Agriculture committees and toward a full House vote, demonstrating growing bipartisan momentum for comprehensive crypto regulation.[1] The GENIUS Act represents the first comprehensive federal framework governing stablecoins, setting the stage for what could become the most significant digital asset regulatory development in years. The bill now advances to the House of Representatives, with President Trump expressing intent to sign stablecoin legislation before Congress’s August recess.
Key Provisions
The GENIUS Act would create three distinct categories of permitted issuers: subsidiaries of insured depository institutions, federal qualified payment stablecoin issuers regulated by the Office of the Comptroller of the Currency, and state qualified payment stablecoin issuers supervised by certified state regulators.
The proposed regulatory framework centers on a stringent reserve requirement that would mandate permitted issuers maintain identifiable reserves backing outstanding stablecoins on at least a 1:1 basis. These reserves would need to comprise highly liquid, low-risk assets, including US coins and currency, demand deposits at insured institutions, Treasury securities with 93 days or less maturity, and approved repurchase agreements. The GENIUS Act would explicitly prohibit rehypothecation of these reserves.
The Act would impose comprehensive operational requirements, including monthly reserve composition disclosures, public redemption policies with transparent fee structures, and robust anti-money laundering compliance programs. Large issuers with over $50 billion in outstanding tokens would be required to publish audited financial statements prepared in accordance with generally accepted accounting principles. All permitted issuers would face ongoing examination and supervision by their primary federal regulator, which would be granted enforcement authority, including civil monetary penalties and registration suspension powers.
The legislation would also prohibit stablecoin issuers from paying any form of interest or yield to holders solely in connection with holding stablecoins, effectively barring yield-bearing stablecoins. Additionally, the Act directs Treasury to study “non-payment stablecoins,” including algorithmic stablecoins that rely solely on other digital assets created by the same originator to maintain their fixed price, suggesting these types of stablecoins fall outside the current regulatory framework.
Importantly, the legislation would explicitly exclude payment stablecoins issued by permitted entities from the definition of “security” under federal securities laws, providing critical regulatory clarity that has been a major source of uncertainty in the digital asset space.[2] The legislation would also establish a three-year transition period after which digital asset service providers may only offer stablecoins issued by permitted entities.
Next Steps and Industry Impact
The GENIUS Act must now pass the House of Representatives before reaching President Trump’s desk. Trump has indicated he wants to sign stablecoin legislation before Congress’s August recess, creating potential momentum for House consideration. If enacted, the legislation would take effect 18 months after passage or 120 days after federal regulators issue implementing regulations, whichever comes first.
For the stablecoin sector, the GENIUS Act would provide the regulatory clarity that has long been sought by financial institutions looking to issue or use stablecoins.[3] The framework could accelerate stablecoin adoption by traditional financial institutions while potentially creating competitive advantages for compliant US-based stablecoin issuers over offshore competitors. The legislation’s reserve requirements and operational standards could help establish consumer confidence in stablecoins as a legitimate financial instrument. This may drive growth in the $240 billion market as major corporations explore stablecoin applications.
[1]See Katten’s Quick Reads post discussing the introduction of the Clarity Act here.
[2]See Katten’s Quick Reads post on recent guidance issued by the Division of Corporation Finance of the Securities and Exchange Commission, which clarified that covered stablecoins are not securities.
[3]See Katten’s client advisory on recent guidance from banking regulators easing restrictions against banks and insured depository institutions from participating in “crypto-related activities,” including maintaining stablecoin reserves and issuing cryptocurrencies such as stablecoins.