North Dakota Passes New Data Security Law for “Financial Corporations”
North Dakota recently passed a law establishing new rules for certain financial companies operating in the state – specifically “financial corporations.” The new obligations will take effect on August 1, 2025. They will apply to businesses that the North Dakota department of financial institutions regulates. Financial institutions (like banks and loan companies) and credit unions are not regulated by that entity.
Under the new requirements, covered entities must create a written information security program and designate a person to oversee that program. Covered entities must base their information security programs on a written risk assessment that identifies risks to their customers’ information. The program includes breach response and reporting provisions for incidents that impact customer information. Covered entities will also have to periodically complete new risk assessments to evaluate their security measures and monitor the efficacy of the program.
The law also creates new rules for reporting data breaches. Namely, covered financial companies must notify the North Dakota Commissioner of the Department of Financial Institutions if there is a “notification event.” A notification event occurs when an unauthorized person accesses unencrypted customer information. If this event involves the information of at least 500 customers, the company must notify the Commissioner as soon as possible, but no later than 45 days after discovering the issue. The law states that a covered entity “discovers” an event as soon as any employee, officer, or agent of the corporation learns about it.
Putting it Into Practice: Financial corporations regulated by the North Dakota department of financial institutions should take note of these changes and make updates as might be needed to their security program and incident response plan prior to August 1st.
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FRAUD NOTIFICATION EXEMPT?: TCPA Claim Against Lone Star Credit Union Tested In First-of-Its-Kind Ruling
The financial institution fraud exemption has been on the books now since 2015.
It permits financial entities to send fraud notifications to cell phones without consent under certain limited circumstances.
For the interested, in order to take advantage of the exemption the caller must assure the following:
Voice calls and text messages must be sent only to the wireless telephone number provided by the customer of the financial institution;
Voice calls and text messages must state the name and contact information of the financial institution (for voice calls, these disclosures must be made at the beginning of the call);
Voice calls and text messages are strictly limited to transactions and events that suggest a risk of fraud or identity theft or possible breaches of the security of customers’ personal information;
Voice calls and text messages must not include any telemarketing, cross-marketing, solicitation, debt collection, or advertising content;
Voice calls and text messages must be concise, generally one minute or less in length for voice calls (unless more time is needed to obtain customer responses or answer customer questions) or 160 characters or less in length for text messages;
A financial institution may initiate no more than three messages (whether by voice call or text message) per event over a three-day period for an affected account;
A financial institution must offer recipients within each message an easy means to opt out of future such messages; voice calls that could be answered by a live person must include an automated, interactive voice- and/or key press-activated opt out mechanism that enables the call recipient to make an opt-out request prior to terminating the call; voice calls that could be answered by an answering machine or voice mail service must include a toll-free number that the consumer can call to opt out of future calls; text messages must inform recipients of the ability to opt out by replying “STOP,” which will be the exclusive means by which consumers may opt out of such messages; and
A financial institution must honor opt-out requests immediately. 47 C.F.R. § 64.1200(a)(9)(iii)
Cool.
So in Brooks v. Lone Star Credit Union 2025 WL 1654697 (M.D. Fl. June 11, 2025) the court issued a rare ruling testing the scope of this exemption.
In Brooks the Plaintiff received a prerecorded voicemail that stated:
This is the fraud detection department for Lonestar credit union calling for Rena Sharzer[ ]. We need to verify some recent activity on your card ending…7 0 8 0[.] In order to prevent possible difficulties using your card it is important that you call us back at your earliest convenience toll-free at [phone number]. Verify this activity[.] Please reference case number 3 5 7 8 1[.] [R]eturning our call give me a call us back [24] hours a day seven days a week.
Plaintiff argued the call was made without consent and that she did not know anyone named Reza Sharzer. In other words, this is a wrong number prerecorded call case– the most dangerous TCPA class action flavor.
Lone Star responded arguing that the message was completely legal and exempted under the fraud exemption rules and moved to dismiss on that basis.
The Court DENIED the motion, but found most the factor weighed in favor of the credit union. However the court determined whether or not plaintiff was charged for the call and whether the LSCU offered an automatic opt out feature were facts that were not alleged in the complaint. Therefore the case could not be dismissed.
Recognizing the limited issues at stake, however, the court issued limited and bifurcated discovery on these two factual issues. The Court also required a more definite statement of the case to assure the factual allegations related to any other phone calls at issue were spelled out.
Really interesting case here. Very few decisions address the fraud exemption and, to my knowledge, this is the first one to do so at the pleadings stage.
The limited discovery is a good news bad news situation for the credit union in my view. The Court has essentially front-loaded the ESSENTIAL substantive issue– did the CU properly deploy its fraud messages? If so the case is gone. But if not this case seems destined to class certification given the similarities among class member experiences.
So very high stakes.
Update: Senate Bill 6–A Texas Bill Impacting Large Load Development in ERCOT
As previously reported, Sen. Phil King and Sen. Charles Schwertner introduced Texas Senate Bill 6 (SB6) in February 2025. After various amendments and updates, the bill has passed the Texas House and Senate and is now before Governor Greg Abbott for his approval. If not vetoed, this bill will directly impact large load customers (specifically, electricity consumers of more than 75 megawatts (MW), unless the Texas Public Utility Commission (the PUCT) determines that a lower threshold is necessary) and entities currently in or contemplating a co-location arrangement in the Electric Reliability Council of Texas (ERCOT) region. SB6, or any other bill passed by the legislature, can also become law without Governor Abbott’s signature.
The legislative purpose of SB6 is to ensure large load customers contribute to the recovery of interconnection costs, establish grid reliability protection measures, bring transparency and credibility to load forecasting, and protect customers from outages by requiring large loads to share the load shed obligation during times of shortage.
Interconnecting Large Loads
SB6 requires the PUCT to adopt standards for interconnecting large load customers in ERCOT “in a manner designed to support business development in [Texas] while minimizing the potential for stranded infrastructure costs and maintaining system reliability.” SB6 further provides that the standards apply “to customers requesting a new or expanded interconnection where the total load at a single site would exceed a demand threshold established by the [PUCT] based on the size of loads that significantly impact transmission needs” in ERCOT.
The PUCT’s standards must require (i) the large load customer to disclose to the interconnecting utility whether the customer is pursuing substantially similar requests that would result in a material change, delay, or withdrawal of the interconnection request; (ii) the large load customer to disclose to the interconnecting utility information about the customer’s on-site backup generation facilities (facilities not capable of exporting energy to ERCOT and that serve at least 50% of on-site demand); (iii) a flat study fee of at least US$100,000 to be paid to the interconnecting utility for initial transmission screening; (iv) a method for a large load customer to demonstrate site control for the proposed load location; (v) uniform financial commitment requirements for the development of transmission infrastructure needed to serve a large load customer—the standard must provide that satisfactory proof of financial commitment may include (a) security provided on a dollar per MW basis, (b) contribution in aid of construction, (c) security provided under an agreement that requires a large load customer to pay for significant equipment or services in advance of signing an agreement to establish electric delivery service, or (d) another form of financial commitment acceptable to the PUCT; (vi) uniform requirements for determining when capacity that is subject to an outstanding financial commitment may be reallocated; and (vii) procedures to allow ERCOT to access any information collected by the interconnecting utility to ensure compliance with the standards for transmission planning analysis.
The purpose of many of these requirements is to provide ERCOT and the interconnecting utility with a better sense of which large load will move forward in the interconnection queue versus those that are duplicative or do not have the requisite site control or financial backing to move forward. The Texas Legislature recognized that these large loads are impacting ERCOT’s forecasting capabilities and that it is essential for ERCOT to have a better understanding of which large loads will and will not be built.
SB6 provides that, during an energy emergency alert, ERCOT may issue reasonable notice that large load customers with on-site backup generating facilities may be directed to either curtail load or deploy the customer’s on-site backup generation.
SB6 also directs the PUCT to establish criteria by which ERCOT includes forecasted large load of any peak demand in resource adequacy and transmission planning models and reports.
Co-Location
In addition to the interconnection standards addressed above, SB6 creates standards and requirements for the co-location of large load customers with existing generation resources. A co-location arrangement is an arrangement where generation and load are located near each other and the generation serves the load before the point of interconnection and without using the grid.
Under SB6, a power generation company, electric cooperative, or municipally owned utility must submit a notice to ERCOT before implementing a net metering arrangement between an operating stand-alone generation resource registered in ERCOT as of 1 September 2025 and a new large load customer. The provisions in this new Public Utility Regulatory Act section do not apply to a generation resource (i) that registered with a co-located large load customer at the time of energization (even if the load is energized at a later date), or (ii) where a majority interest is owned directly or indirectly as of 1 January 2025 by a parent company of the net metering customer.
ERCOT must study the system impacts of a proposed net metering arrangement and removal of the generation on the system. ERCOT must complete the study and submit the results to the PUCT with a recommendation by the 120th day after ERCOT received the request and associated information regarding the arrangement. The PUCT then would have 60 days from the date it receives the study results to approve, deny, or impose reasonable conditions on the proposed net metering arrangement (as necessary) to maintain system reliability. Such conditions may include (i) requiring customers to be held harmless for stranded or underutilized transmission assets resulting from the behind-the-meter operation, (ii) requiring the retail customer who is served behind-the-meter to reduce load during certain events, or (iii) requiring the generation resource to make capacity available to ERCOT during certain events. The PUCT is also permitted, if the conditions are not limited to a specific period, to review the conditions at least every five years to determine if they should be extended or rescinded. If the PUCT does not approve, deny, or impose conditions on the proposed net metering arrangement before the expiration of the 60-day deadline, then the arrangement is deemed approved.
Demand Management
In addition to interconnection and co-location requirements, SB6 requires ERCOT to ensure that each transmission and distribution utility, electric cooperative, and municipally owned utility serving a transmission-voltage customer interconnected after 31 December 2025 develops a protocol, including the installation of necessary equipment or technology before the customer is interconnected, to allow the load to be curtailed during firm load shed, unless it is a “critical load industrial customer” or the load is designated as a “critical natural gas facility.” ERCOT will also develop a reliability service to competitively procure demand reductions from large load customers subject to the new rules established by the PUCT.
Transmission Cost Allocation Methods Assessed
Finally, SB 6 requires the PUCT, by 31 December 2026, to evaluate whether the existing methodology used to charge wholesale transmission costs continues to appropriately assign costs for transmission investment. As part of this analysis, the PUCT must evaluate (i) whether the current four coincident peak method ensures that all loads appropriately contribute to the recovery of transmission costs, (ii) whether alternative methods to calculate wholesale transmission rates would more appropriately assign costs, and (iii) what portion of the costs related to access to and wholesale service from the transmission system should be nonbypassable. The PUCT is charged with evaluating whether the PUCT’s retail ratemaking practice ensures transmission cost recovery appropriately charges system costs to each customer class that causes those costs. The PUCT must begin this evaluation within 90 days of the earlier of either the governor’s signing of SB6 or 22 June 2025. After the PUCT completes its evaluation process, and no later than 31 December 2026, the PUCT must amend its rules to ensure wholesale transmission charges appropriately assign costs for transmission investment.
While SB6 has passed both Texas chambers and is projected to not be vetoed by the Governor, the PUCT will still have a lot of work ahead of it to implement the various provisions in the statute. This will give interested parties an additional opportunity to have their voices heard during the process to implement this legislation.
What Every Multinational Company Should Know About … Mitigating Risks Posed by the New Trump Administration Focus on Drug Cartels and TCOs
The Trump Administration’s crackdown on cartels and transnational criminal organizations (TCOs) operating abroad and in the United States is a significant Department of Justice (DOJ) priority.[1] The Trump Administration already has designated certain cartels and transnational criminal organizations, or “TCOs,” as terrorists (labeling them as either Specially Designated Global Terrorists (SDGTs), Foreign Terrorist Organizations (FTOs), or both), thereby blocking these groups or persons from conducting transactions in or with the United States, any U.S, persons, or even non-U.S. persons where there is some jurisdictional nexus to the United States, including the use of U.S. dollars related to the transaction.
Engaging in transactions with FTOs can result in civil penalties or even criminal prosecution. Indeed, at the end of May 2025, a federal indictment was unsealed, charging two men from Utah with conspiring “to provide material support” to the Mexican cartels “in the form of U.S. currency” through their operation of a crude oil company based in Texas. Notably, the cartel at issue was designated under the Trump Administration, on February 20, 2025.
This is only a precursor to the many similar actions that will be coming under the Trump Administration. In advance of further enforcement actions by the DOJ and other agencies, companies doing business in areas where cartels operate or TCO activity is prevalent should take practical steps to ensure compliance with applicable U.S. laws and regulations. The Trump Administration’s renewed focus on cartel and TCO-related threats means that multinational companies must reassess their risk exposure in this evolving enforcement environment.
Under this new approach, companies operating in regions with known cartel or TCO activity — including Mexico, Central and South America, the Caribbean, and parts of Africa — may face heightened scrutiny from U.S. regulators and enforcement agencies. In some cases, exposure could arise not from direct contact with cartels but from indirect connections through suppliers, subcontractors, or intermediaries.
To manage these increased risks, companies — particularly those with complex global operations or vulnerable supply chains — should undertake a frank and rigorous compliance assessment. Key measures to consider include the following:
Strengthen and Expand Due Diligence Protocols. Conduct enhanced due diligence on all third-party business partners, with special emphasis on new suppliers, distributors, and intermediaries. Go beyond traditional onboarding checks by including screenings for SDGTs, FTOs, and other Specially Designated Nationals (SDNs) identified by OFAC and other agencies. SDGT/FTO screening should occur at the same time as OFAC SDN screening and should be incorporated into both supplier onboarding and recurring supply chain integrity audits. When using automated tools, ensure they are calibrated to flag indirect affiliations or complex ownership structures that may obscure ties to prohibited actors.
Update Supply Chain and Partner Contracts to Include Risk Controls. Review and update all supply chain, distribution, and vendor contracts to include explicit anti-cartel and anti-transnational criminal organization clauses. Use template language vetted by legal counsel to maintain consistency across global agreements.
Reevaluate Existing Relationships for Creeping Risk. Even longstanding, previously vetted business partners may change in ways that introduce new risks, such as through a change in beneficial ownership, acquisition by unknown entities, or subtle expansion of services into new sectors. Establish a process for ongoing counterparty review and re-screening. Changes in business scope, leadership, or operating regions should automatically trigger a due diligence refresh and possibly a targeted audit.
Scrutinize Cash Payments and Sudden Financial Behavior Shifts. Cash transactions are frequently used by TCOs and cartels to avoid detection. Companies should monitor for counterparties that insist on cash payments or suddenly switch from traceable payment methods (e.g., wire transfers, checks) to cash-based transactions. Establish a robust vendor management and transaction monitoring system capable of flagging such shifts. Red flags may include frequent invoice overpayments, ambiguous remittance details, or transactions routed through high-risk jurisdictions.
Conduct Deep-Dive Audits on High-Risk Counterparties. Map all tiers of your supply chain to identify potential exposure points to cartel activity or TCO influence or cartel activity. For high-risk counterparties — particularly those located in known trafficking corridors or regions with a high volume of organized crime — conduct transaction-level audits to assess whom they are paying, the nature of those payments, and whether financial flows align with declared business purposes. Routinely screen for changes in beneficial ownership, payment methods, and contract behavior. If indicators of risk arise, consider notifying the counterparty and requiring remedial steps.
Identify and Monitor Vulnerable Industries. Certain industries are systematically targeted by cartels and TCOs for their logistical value, regulatory complexity, or local influence. These include (1) logistics and transportation firms, especially those crossing remote borders or maritime routes; (2) construction and infrastructure developers, often required to interact with local permitting authorities; (3) utility monopolies or service providers, like trash collection or internet services, where regional dominance makes them strategic takeover targets; and (4) sectors with powerful unions or complex labor dynamics, which may be subject to infiltration or co-option. When partnering with companies in these industries — especially in regions known for cartel or TCO activity — layer additional scrutiny into the relationship and maintain heightened oversight throughout the contract lifecycle.
Institutionalize Training and Internal Reporting Channels. Train employees, compliance personnel and, where appropriate, third-party partner employees on how to identify and report signs of cartel or TCO interference. Go beyond providing lists of restricted parties — build awareness of red flags. Establish secure, anonymous internal whistleblower channels and provide amnesty or protection policies to encourage early reporting of compliance breaches or attempted criminal coercion.
Establish Executive and Board Oversight Mechanisms. Ensure that TCO- and cartel-related risks are regularly escalated to executive leadership and the board of directors. Incorporate updates into quarterly compliance reports or risk committee briefings. For companies operating in high-risk regions, consider designating a senior-level risk officer or task force to oversee response protocols and monitoring, or appoint someone within procurement or the legal department to perform these risk-management tasks.
Develop a Crisis Response Plan for Criminal Acts. Cartels often rely on violent or coercive tactics, such as extortion, theft, fraud, and even kidnapping, to infiltrate business operations. Companies operating in high-risk regions should prepare in advance. Develop a crisis management protocol, including incident escalation steps, points of contact within local and international law enforcement, communication procedures, and protocols for employee safety and legal response. Consider risk-management exercises to test responsiveness.
Monitor Public Crime Reports and Prepare for Legal Requests. Maintain regular review of public crime databases, law enforcement briefings, and NGO reports to stay informed about emerging threats in your company’s regions of operation. Coordinate with inside and outside counsel to ensure readiness to respond to subpoenas, civil investigative demands, and voluntary requests for information, as the Trump Administration is expected to ramp up these tools for probing potential violations of law. Rapid response capability is especially important in high-risk sectors or jurisdictions where investigations may commence with little warning.
Implement Incident Documentation and Red Flag Response Protocols. Create a formal procedure for documenting red flags, screening matches, due diligence findings, and responses to suspected cartel/TCO exposure. Maintain a secure compliance log or internal case management system to ensure continuity, support audits, and demonstrate good faith efforts in the event of enforcement action.
The Trump Administration’s policy pivot toward aggressive enforcement of cartel and TCO-related crimes brings heightened risk for global businesses — not just for direct violations but for secondary liability through unmonitored third parties. A proactive, systems-based approach to compliance, backed by due diligence, real-time monitoring, employee training, and strong response plans, is essential to avoid reputational, financial, and legal damage in this new enforcement landscape.
Nonetheless, while the Trump Administration’s enhanced focus and enforcement strategy on eliminating cartels and TCOs may be a shift from the previous administration’s enforcement priorities, multinational companies do not have to reinvent the wheel to ensure they are operating in compliance with relevant U.S. laws. Companies should look to harness existing compliance procedures such as due diligence supplier onboarding measures, OFAC screening, supply chain integrity reviews, and red flags awareness and to adapt them to the new enforcement priorities of the new administration. By proactively following longstanding compliance best practices, they can effectively mitigate against these heightened risks.
[1] See Executive Order 14157, “Designating Cartels and Other Organizations As Foreign Terrorist Organizations And Specially Designated Global Terrorists,” (Jan. 20, 2025); Office of the Attorney General, “Total Elimination of Cartels and Transnational Criminal Organizations,” (Feb. 5, 2025); Office of the Spokesperson of the U.S. State Dep’t, “Designation of International Cartels,” (Feb. 20, 2025); Criminal Division of U.S. Dep’t of State, “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime (May 12, 2025).
Navigating Declaratory Judgment: Mitek’s Bid to Head Off USAA’s Patent Claims
This case [1] addresses declaratory judgments of non-infringement in relation to subject-matter jurisdiction and the district court’s refusal to exercise discretionary jurisdiction.
Background
In June 2020, Mitek Systems, Inc. (“Mitek”) filed a declaratory judgment action in the Eastern District of Texas, asking the court to declare that its MiSnap software did not infringe United Services Automobile Association’s (“USAA”) U.S. Patents Nos. 8,699,779; 9,336,517; 9,818,090; and 8,977,571. MiSnap is a software development kit used by banks to capture check images in their mobile apps. Mitek pointed to USAA’s campaign of letters and its suit against Wells Fargo as evidence of a credible threat of infringement or indemnity claims.
The district court dismissed the declaratory judgment case for lack of subject-matter jurisdiction, finding no actual controversy, and declined to exercise its discretion. On first appeal, the Federal Circuit vacated both rulings and remanded for “finer parsing” of the facts—explicitly instructing the district court to categorize any 12(b)(1) challenge as facial or factual and to revisit Mitek’s two bases for standing: threat of direct/indirect infringement and potential indemnity liability.
On remand, after extensive briefing and fact finding, the district court again concluded that Mitek had no reasonable apprehension of suit—MiSnap did not itself practice all claim elements, USAA never pointed to Mitek documentation showing inducement, and MiSnap had substantial non-infringing uses. It also held that no indemnity agreements exposed Mitek to likely liability. Even if jurisdiction existed, the court would decline declaratory relief, urging Mitek instead to intervene in any future USAA suit against a customer. Mitek timely appealed.
Issue(s)
Whether the district court erred in finding no subject-matter jurisdiction over Mitek’s declaratory judgment action and whether it abused its discretion in declining to exercise jurisdiction.
Holding(s)
The Federal Circuit held that Mitek failed to establish a case or controversy, as it lacked a reasonable apprehension of infringement and no real risk of indemnity liability. The Federal Circuit also held that the district court did not abuse its discretion in refusing to hear the case, given better remedies available through intervention.
Reasoning
For infringement, the Federal Circuit noted that MiSnap—a toolkit, not a complete banking app—cannot satisfy every element of USAA’s asserted claims, and USAA never alleged otherwise. On inducement, nothing in USAA’s claim charts or MiSnap documentation showed affirmative steps by Mitek to encourage full claim performance. For contributory infringement, the record confirmed that MiSnap had substantial non-infringing uses and USAA never argued otherwise. After Mitek filed suit, USAA settled its Wells Fargo case, further undermining any “ongoing” controversy.
On indemnity, the Federal Circuit reviewed the actual contracts and found carve-outs shielding Mitek from likely payment obligations. Mitek could not simply point to the existence of indemnity clauses; it had to show a reasonable potential for liability, which it could not.
Finally, even assuming jurisdiction, the Federal Circuit approved the district court’s discretionary decision. Intervention in an actual infringement suit against a bank customer would allow full airing of factual disputes—customer-specific use, customization, and knowledge—that a standalone declaratory judgment action could not resolve.
In conclusion, Mitek Systems v. USAA underscores the high bar for patent declaratory judgment jurisdiction. Suppliers must show a genuine, immediate threat of suit or clear indemnity exposure, not merely fear or customer-targeted enforcement. District courts retain broad discretion to decline declaratory relief when better avenues—such as intervention—exist. Parties facing indirect or contributory claims should ensure their products, documentation, and indemnity provisions are carefully aligned to avoid such jurisdictional roadblocks.
Footnotes
[1] Mitek Systems, Inc. v. United Services Automobile Association, 2023-1687 (Fed. Cir., June 12, 2025)
Energy & Sustainability Washington Update — June 2025
In a pivotal month for energy and fiscal policy, House Republicans advanced their sweeping reconciliation package, narrowly passing the bill on May 22 by a 215-214 vote. The legislation aims to make permanent the expiring tax provisions of the 2017 Tax Cuts and Jobs Act while rolling back key elements of the Inflation Reduction Act (IRA), with clean energy tax credits taking a bigger hit than many had anticipated. Despite early signs of potential bipartisan concern — most notably a letter from 21 House Republicans expressing reservations about undermining energy incentives — support for clean energy did not materialize when it counted. The House action comes amid a flurry of activity across the executive branch, with President Trump issuing a series of executive orders to bolster the US nuclear sector and federal agency leaders laying out plans to reshape energy and environmental programs. As the bill moves to the Senate, where internal GOP divisions are already surfacing, it’s unclear whether the more aggressive provisions will stick if the Senate opts for a more moderate path, leaving the broader Republican energy and budget agenda facing a critical political test.
Reconciliation Package Passes Through the House
On May 22, the House narrowly passed its reconciliation bill in a 215-214 vote, with one member abstaining. The legislation seeks to make permanent the lower tax rates established by the Republicans’ 2017 Tax Cuts and Jobs Act, which are set to expire at the end of this year. What advanced was an amended package consolidating 11 separate bills previously approved by their respective committees. Notably, the measure includes significant revisions to tax provisions tied to the Inflation Reduction Act.
Clean Electricity ITC and PTC: For those wishing to utilize the clean electricity production tax credit (45Y) and investment tax credit (48E), projects must begin construction within 60 days of the legislation’s enactment. Additionally, to maintain eligibility to receive the tax credits, the projects must be operational by December 31, 2028. This is an accelerated timeline from the one originally proposed by the House Ways and Means Committee version of the bill, which had set a 2031 deadline. Projects failing to meet these requirements would no longer be eligible for the credits.
Foreign Entities of Concern (FEOC) Restrictions are now applied to these credits. After enactment of the legislation, the credit user cannot be a specified foreign entity. One year after enactment, facilities that begin construction cannot receive material assistance from a prohibited foreign entity. Two years after enactment, the credit user cannot be a foreign-influenced entity or make an applicable payment to a prohibited foreign entity.
Immediate Elimination of these credits for solar or wind residential or rural leases.
Nuclear Carveout: Eligible advanced nuclear facilities and expanded nuclear facilities are exempted from the 60-day beginning-of-construction requirements and instead must only comply with the placed-in-service deadline on December 31, 2028.
Nuclear Power Production Credit: For 45U, the credit expires at the end of 2031.
Advanced Manufacturing Tax Credit: For 45X, production occurring after 2031 will now no longer qualify — one year earlier than current law. In addition, under the legislation, wind-energy components cease to be eligible after 2027 — five years earlier than the IRA intended.
Clean Fuel Production Credit: For 45Z, the credit’s life is extended from 2028 to 2031. Under the legislation, feedstock must be sourced exclusively from the United States, Canada, or Mexico. Credits are denied if the producer becomes a prohibited foreign entity or foreign-influenced entity.
Carbon Sequestrating Credit: For 45Q, the credit is maintained as originally written in the IRA, remaining until 2032.
Clean Hydrogen Production Tax Credit: 45V is eliminated for new projects beginning after December 31, 2025.
Electric Vehicles Credits: The Clean Vehicle Credit (30D), Used Clean Vehicle Credit (25E), Alternative Fuel Vehicle Refueling Property Credit (30C), and Qualified Commercial Clean Vehicle Credit (45W) are all eliminated for new projects beginning after December 31, 2025.
Energy Efficiency Credits: The Energy Efficient Home Improvement Tax Credit (25C), Residential Clean Energy Property Credit (25D), and Energy Efficient New Homes Tax Credit for Home Builders (45L) are all eliminated for new projects beginning after December 31, 2025.
For all the credits listed above — except the Clean Electricity ITC and PTC, which have their own, more-stringent requirements — the following FOEC restrictions now apply: After enactment, the credit user cannot be a specified foreign entity. Two years after enactment, the credit user also cannot be a foreign-influenced entity — defined by if, during the taxable year, a specified foreign entity has the authority to appoint a board member, executive officer, or similar individual; if a single specified foreign entity owns at least 10% of the entity; if multiple specified foreign entities collectively own 25% or more of the entity; or if they together hold 25% or more of its debt. Furthermore, an entity will also be considered foreign-influenced if, during the prior taxable year, it knowingly, or should have known it, made payments — such as dividends, interest, compensation for services, rents, royalties, guarantees, or other fixed and periodic payments — either amounting to 10% or more of such payments to a single specified foreign entity or 25% or more in total to multiple specified foreign entities.
Beyond tax measures, the bill claws back unobligated IRA funds from both the Department of Energy (DOE) and the Environmental Protection Agency (EPA). Specifically, the bill eliminates unused IRA credit subsidy funding, which is a key source of funding for the Loan Programs Office (LPO). While the bill preserves existing loan authority, the rescission of the credit subsidy could have significant implications for the LPO’s ability to administer its programs. It also removes a previously included — and controversial — provision that would have allowed the sale of small public land tracts in Utah and Nevada for development.
The legislation now heads to the Senate, where significant changes are expected. Republican leaders aim to pass the bill before the July 4 recess, though procedural and political hurdles could delay action beyond the mid-August deadline, which is tied to the recent $4 trillion increase in the federal debt ceiling.
With a 53-47 majority, Senate Republicans need at least 51 votes to pass the measure. However, several GOP senators have already expressed concerns. Senators Thom Tillis (R-NC), Lisa Murkowski (R-Alaska), John Curtis (R-Utah), and Jerry Moran (R-Kan.) have criticized the House bill’s rollback of IRA tax credits as too aggressive. Others, including Senators Josh Hawley (R-Mo.) and Susan Collins (R-Maine), oppose the bill’s proposed Medicaid cuts and have publicly stated they have “Medicaid red lines” they won’t cross. On the opposite end, Senators Ron Johnson (R-Wis.), Rick Scott (R-Fla.), Mike Lee (R-Utah), and Rand Paul (R-Ky.) argue the bill doesn’t go far enough in addressing deficit reduction, signaling that Senate Republicans must navigate divisions from both moderates and fiscal hardliners.
Trump’s Executive Orders on Nuclear
On May 23, President Trump announced four Executive Orders (EOs) aimed at boosting the nuclear industry:
“Deploying Advanced Nuclear Reactor Technologies for National Security” mandates the acceleration of development and use of advanced nuclear technologies by the federal government, including establishing a program for the use of nuclear energy at military installations and directing the DOE to designate sites for deploying these reactors.
“Reforming Nuclear Reactor Testing at the Department of Energy” mandates the DOE to expedite the testing and deployment of advanced reactors through streamlined processes at National Laboratories and a new pilot program outside of them, with a focus on reaching operational status for qualified test reactors and at least three pilot program reactors within specific deadlines. Furthermore, the order requires the DOE to reform its environmental review procedures under the National Environmental Policy Act (NEPA) to remove barriers to reactor development.
“Reinvigorating the Nuclear Industrial Base” emphasizes the critical need to address challenges like foreign dominance in nuclear reactor designs and a reliance on external sources for nuclear fuel. The order directs the Secretary of Energy to use the authority provided by the Defense Production Act (DPA) to seek voluntary agreements with domestic nuclear energy companies. These agreements are intended to facilitate cooperative procurement of LEU and HALEU and allow consultation to enhance spent nuclear fuel management (including recycling and reprocessing), ensure the availability of the nuclear fuel supply chain capacity, and expand the nuclear energy workforce.
“Ordering the Reform of the Nuclear Regulatory Commission” directs the Nuclear Regulatory Commission to reorganize to “promote the expeditious processing of license applications and the adoption of innovative technology.” A dedicated team of at least 20 officials will be created to draft new regulations.
Not all of this will ultimately prove realistic. For instance, the Trump administration called for 20 new Section 123 Agreements for Peaceful Nuclear Cooperation by 2028 when only 25 have been signed since 1954. The administration also set a goal of 10 new large reactors with complete designs under construction by 2030, when only two have been done in the last 40 years. Still these four EOs clearly shine a light on the administration’s goals for nuclear and the potential for revitalizing this industry.
Agency Updates
Trump’s recent executive actions align with statements made by Secretary of Energy Chris Wright during a DOE budget oversight hearing. Wright emphasized his strong support for using the DOE’s Loan Programs Office to accelerate the deployment of nuclear energy projects. He also highlighted his top priorities, which include advancing US artificial intelligence capabilities, supporting the emerging geothermal industry, and streamlining the approval process for oil, gas, and coal projects. However, on May 15, the DOE announced that it would be reviewing 179 individual awards totaling over $15 billion, starting with those at the LPO, an initiative that may run counter to Secretary Wright’s comments about using the LPO for nuclear.
During budget oversight hearings before both the House and Senate, EPA Administrator Lee Zeldin faced sharp questioning from lawmakers. Following President Trump’s “skinny budget request,” Zeldin announced plans to eliminate the EPA’s Office of Atmospheric Protection — which oversees the Energy Star program — as well as the Office of Air Quality Planning and Standards. In their place, the agency will establish two new offices within the Office of Air and Radiation: the Office of Clean Air Programs and the Office of State Air Partnerships. When pressed about the future of Energy Star, Zeldin stated he is in discussions with several private entities to take over the program, arguing that since it is not mandated by Congress, the EPA has the authority to transfer its management. However, the privatization of the Energy Star program would still likely require congressional authorization.
Meanwhile, the confirmation process for key positions across federal agencies continues to progress. In May, several appointments were finalized.
At the DOE, the following were advanced out of the Senate committees: Jonathan Brightbill to be General Counsel, Tina Pierce to be Chief Financial Officer, Wells Griffith to be Undersecretary, Brandon Williams to be Undersecretary for Nuclear Security / Administrator for Nuclear Security, Dario Gil to be Undersecretary for Science, Kyle Haustveit to be Assistant Secretary for Fossil Energy and Carbon Management, Ted Garrish to be Assistant Secretary for Nuclear Energy, Tristan Abbey to be Administrator of the US Energy Information Administration, Matthew Napoli to be Deputy Administrator for Defense Nuclear Nonproliferation, Scott Pappano to be Principal Deputy Administrator of the National Nuclear Security Administration, Conner Prochaska to be Director of the Advanced Research Projects Agency – Energy, and Catherine Jereza to be Assistant Secretary of Electricity. Timothy Walsh has been nominated for Assistant Secretary of Environmental Management and Audrey Robertson has been nominated for Assistant Secretary for Energy Efficiency and Renewable Energy. A full chart reflecting everything we know about staffing within the DOE can be found here. The chart will continue to be updated as more information becomes available.
At the EPA, Jeffrey Hall was nominated to be Assistant Administrator for Enforcement and Compliance Assurance, and John Busterud to be Assistant Administrator, Office of Solid Waste.
For Interior, nominations for Ned Mamula to be Director, US Geological Survey, Brian Nesvik to be Director, US Fish and Wildlife Service, Andrea Travnicek to be Assistant Secretary for Water and Science, Leslie Beyer to be Assistant Secretary for Land and Minerals Management, and William L. Doffermyre to be Solicitor were all advanced out of the Senate committees.
UPDATE: First Amendment Freedoms and Federal Funds: Why Harvard’s Stand Matters for All Americans
Since filing its Complaint on April 21, 2025, Harvard has faced an intensifying series of actions from the Trump Administration. In early May, the Administration revoked all new federal research grants to the university, including those from the National Institutes of Health, National Science Foundation, and the Departments of Agriculture, Energy, and Housing and Urban Development.1 The Administration has also threatened to redirect $3 billion in Harvard’s federal grant funding to vocational schools and to revoke the school’s tax-exempt status.2 Most recently, President Trump signed a proclamation to suspend international visas for new students at Harvard.3 Harvard is not alone in warding off attacks from the Administration. Princeton and the University of Pennsylvania face the suspension of hundreds of millions in research grants, and the Department of Education is actively investigating at least ten universities for alleged antisemitism conduct.
As the attacks expand in scope and target, the core constitutional concern remains unchanged: that the Administration’s actions undermine First Amendment principles and jeopardize the health, safety, and scientific progress on which millions of Americans rely. Rather than allow the Court to address the constitutional issues in Harvard’s initial complaint, Harvard is forced to file new complaints to the Administration’s actions, while contending with the onslaught of new attacks. In a May 23, 2025, editorial, “Is Trump Trying to Destroy Harvard?,” The Wall Street Journal wrote: “The Trump Administration has frozen billions in federal grants to Harvard University, threatened its tax-exempt status, and sought to dictate its curriculum and hiring. Now the government seems bent on destroying the school for the offense of fighting back.”5 Indeed, this conflict is far from over, and its implications for academic freedom and American innovation are only beginning to unfold.
This article is an update to First Amendment Freedoms and Federal Funds: Why Harvard’s Stand Matters for All Americans, originally published on June 9, 2025.
The views expressed in this article are those of the author and not necessarily of her law firm, Dilworth Paxson LLP, or The National Law Review.
1 Peter Charalambous, Timeline: Trump Administration’s Actions Against Harvard University, ABC News (May 28, 2025), https://abcnews.go.com/US/timeline-trump-administrations-actions-harvard-university/story?id=122267583
2 Id.
3 Emma Tucker, Trump Signs Proclamation to Suspend Visas for New Harvard International Students, CNN (June 4, 2025), https://www.cnn.com/2025/06/04/us/trump-harvard-student-visas-suspended.
4 Anthony Zurcher, The Fallout from Trump’s War on Harvard Will Long Outlast His Presidency, BBC (May 31, 2025), https://www.bbc.com/news/articles/c0ln9lexyedo
5 The Editorial Board, Is Trump Trying to Destroy Harvard, WSJ (May 23, 2025), https://www.wsj.com/opinion/donald-trump-harvard-dhs-foreign-students-kristi-noem-b8ac80edrd?
The Shift to Alternative Investments: Diversification in Volatile Times
A 2025 survey by the Journal of Financial Planning and the Financial Planning Association, conducted from March 23rd through May 4th, found that financial planners are shifting their investment strategies towards growing alternative investment classes. Why?
The More Immediate Reason
The shift to alternative investments arguably points to investor concerns over the economy. According to the survey, financial planners who are re-evaluating their clients’ allocation strategies are most conscious of anticipated changes in the economy (69%) and market volatility (63%).
Amidst recent economic turmoil, stocks and bonds have both experienced volatility. The first half of 2025 was marked by uncertainty around tariffs, causing the S&P 500 to fall by 10% in the two days after sweeping tariffs were announced. Bonds, historically considered the safer investment, are also seeing rising yields, and concerns have been raised over US debt. These emerging tensions indicate that investors may be losing confidence in the US bond market.
The current uncertainty around traditional assets has thus encouraged investors to explore diversification into alternative investments that can offset their risks. For one, the price of precious metals has historically increased when the stock market is in crisis, with investors seeing greater appeal in tangible assets.
The Longer Term Reason
The increased use of alternative assets was made possible, indeed, inevitable when the JOBS Act took them out of the shadows.
Financial Poise Founder, Jonathan Friedland, was one of the first commentators on record to anticipate the trend toward alternative assets, starting in 2012. To wit, in his 2014 book, The Investor’s Guide to Alternative Assets, he wrote:
“Until recently … federal securities laws prohibited advertising of accredited investment opportunities. Most accredited investors were consequently completely in the dark about them. This changed as a result of the Jumpstart Our Business Startups Act (or ‘JOBS Act’ for short) [signed into law on April 5, 2012].
Under the JOBS Act, entrepreneurs, companies, private equity and venture capital funds, hedge funds, and others are now able to advertise investment opportunities and solicit investments from accredited investors. The JOBS Act is also the law that legalizes equity crowdfunding …
Because of the JOBS Act, accredited investors are going to learn more and more about the existence of the world of alternative assets. No longer will this world be confined to those who, for example, read The Wall Street Journal cover to cover each day. Rather, you are going to hear about it on television shows like Today and Good Morning America.”
Traditional Investments Are Not Going Anywhere
While Friedland predicted in 2012 that the rise of alternative assets was “an inevitability the moment the JOBS Act became law,” he also predicted that most accredited investors would continue to invest most of their investible wealth in the public markets. These predictions, thus far, appear to be right, with the second of them aligning with the survey’s finding that two-thirds of financial planners are still confident in the traditional 60/40 portfolio’s ability to provide the same returns that it has historically.
Diversification & Asset Allocation
The concept of diversification is easily understood: spreading your investments across different assets that are expected to perform in ways that are not correlated should reduce your total risk. In the context of the stock market, for example, if you could invest all your money into only two stocks, you would likely not want to put it all into Coke and Pepsi, or Burger King and McDonald’s, or Meta and Google. Instead, investing in different sectors of the stock market (i.e., different industries) is an example of diversification. But all of this speaks to diversification within an asset class.
The problem is that all publicly traded stocks have some level of correlation with each other. In other words, there are periods when most stocks perform poorly. To protect against this, an investor must also look to diversify among asset classes, and this is generally referred to as asset allocation.
The stock of publicly traded companies is just one asset class. Others include real estate and privately held shares of companies. [Editors’ Note: Read more about this in Investing Basics for Beginners, Installment #3: Never Put All Your Eggs in One Basket.] Assuming you want to invest in such other asset classes in a passive manner (i.e., just as you do when you buy shares of a publicly traded company, as opposed to being part of the management team), each is considered an alternative asset. Thus, vehicles like hedge, private equity, and venture capital funds are additional examples of alternative asset classes, as are things like precious metals and cryptocurrency.
Buyer Beware!
Only 5% of surveyed planners use/recommend cryptocurrency, with 3% expecting an increase in the next 12 months, and 4% expecting a decline. Financial Poise, for what it’s worth, agrees with those experts who view crypto as purely speculative.
Whether right or wrong, there are at least two broader points to be made: First, most people do not understand the world of alternative assets to the same extent they understand traditional investment classes (and the extent to which most people understand even traditional investment classes is, itself, questionable). Second, many, if not most, of the guardrails (e.g., mandatory disclosures, registration requirements, governance standards, and oversight by regulatory bodies like the SEC) that protect investors when investing in publicly traded securities are relaxed, if not absent, when they invest in many alternative asset classes. [Editors’ Note: Read more about this in More Venting About the ‘Democratizing’ of Investing.]
[Editors’ Note: To learn more about this and related topics, you may want to check out the Financial Poise YouTube Channel! This article was originally published on June 10, 2025.]
©2025. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.
The Business Valuation Blues: Sing a Different Song When the Valuation Experts Disagree
One of the thorniest issues private company owners and minority investors may be required to confront in going through a business divorce is determining the value of the minority interest being purchased. It is not unusual for experts to disagree over the value of the minority interest, and this conflict can delay or even derail the business divorce from being completed. Going through endless rounds of negotiation over value may have both of the partners singing the blues. This post therefore focuses on practical solutions for business owners and investors to consider when they need to value a minority ownership interest in the process of a business divorce.
Reasons for Disagreement Among Experts
Business valuation experts generally follow a similar methodology, and as a result it may seem surprising that they can reach results that vary so dramatically. There are a number of factors, however, that help explain these conflicts. First, business valuation experts make assumptions that impact value, and these different assumptions can lead to substantially different results. As a key example, valuation experts will project the future growth rate of the business based on past trends and anticipated future events, and as a result, when the experts use markedly different projected growth rates for the business, they will reach results that have major differences.
Second, the valuation experts also typically apply substantial discounts to minority held interests, which are based on the lack of control and the lack of marketability of the interest held by the minority investor. These discounts are determined, in part, by reviewing previous transactions of similar companies, but selecting different discount rates will have a large impact on the valuation of the minority interest.
Finally, the valuation experts may rely on different data that also leads to wide variances in their opinions. In this regard, the experts will compare and apply the sales of other businesses, but they may include or reject certain sales as applicable, and using different transaction data impacts their results. Similarly, based on their own analysis, the valuation experts may use different industry multiples to apply to the company’s earnings, which is a key driver of total value of the business. If one expert concludes that the proper multiple is 5 and the other says it is 7, that difference may sound small but it will actually be quite large when the multiple is applied to the company’s earnings.
Practical Solutions to Apply to the Valuation Dispute
Given the potential, if not the likelihood, that valuation experts will reach different opinions regarding the value of a minority holding in a private company, majority owners and investors are well-advised to consider options that may allow them to avoid or at least limit these conflicts. These pragmatic approaches are discussed below.
Expert Report Averaging
If the parties anticipate that a large variance will result between the reports of the valuation experts, they can agree to a process in which three different experts are retained, and they can then average the results of all three valuation reports. Typically, this means that the company/majority owner will retain a valuation expert, the minority investor will retain a second expert, and the parties will direct those two experts to select a third, independent expert.
Once all three valuation reports are issued, the partners can agree to one of the following options: (1) they can average all three of the reports, (2) they can decide that the valuation report of the party (either majority owner or investor) that is closest in amount to the third valuation expert’s report will be controlling, or (3) they can average the amount of the two reports that are closest in value to determine the final valuation number. Selecting any of these options in regards to valuation will avoid a legal battle.
Adopt Base Value Plus Earn Out
A second option to avoid valuation conflicts is for the parties to agree on a base price for the purchase of the minority investor’s interest that references the valuation, but that also provides for an additional payment to the minority investor. In this scenario, the minority investor receives a fixed price at closing, along with a carried (non-equity) interest based on the company’s future financial performance. This structure thus provides for the investor to receive somewhat less than the full amount of the valuation price at closing, but with the potential to receive an additional amount greater than the valuation price based on the company’s future performance.
As an example, the valuation report values the minority investor’s interest at $3 million, which the majority owner considers excessive. The parties therefore agree that the investor will be paid $2.25 million at closing (25% less than the valuation report) for its interest, but the minority investor also receives a contractual right to be paid 3% of the total revenues that are generated by the company over the next three years. If the company has generated at least $10 million in revenue during each of the past three years, this might be a win-win scenario, as applying to this formula would generate at least $900,000 in a further payment for the investor if the company continued to generate annual revenues of at least that amount over the next three years.
Obviously, the potential variety of formulas that might work is infinite, but this type of win-win negotiating allows for the majority owner to push back on the total amount paid at closing to the investor while also providing the minority investor with further upside. To make this proposal work, the majority owner may need to establish a floor for the future payment, i.e., provide the investor with a guaranteed payment of at least a certain amount in the future so that the investor is not taking on a totally unprotected gamble.
Arbitration Limited to Resolution of Valuation Dispute
The third practical option to consider involves a targeted resolution process. The manner in which an arbitration is conducted is subject to contract, so rather than engaging in protracted negotiations over a lengthy period, the parties could agree to submit their valuation dispute to a prompt one-day arbitration. This is simple and straightforward as the parties should not need to obtain any discovery if they have all of the financial information necessary for the valuation. The scope of the arbitration can be limited solely to resolving the amount to be paid for the purchase of the minority owner’s interest in the company. In short, the parties submit their valuation reports and testimony from the valuation experts to explain their opinions, and the arbitrator (or panel) issues a final, binding opinion.
Considerations That Apply to Valuation Conflicts
Whatever path the parties decide to go down, they need to set guidelines that will help limit the disputes between them regarding the valuation and the ultimate cost of achieving their business divorce. The procedure for dealing with valuation is generally set forth in some form of a buy-sell agreement.
First, the parties need to set firm deadlines for issuing all of the required valuation reports. Second, they need to provide a mechanism and timetable for the minority investor to obtain access to the financial information that is necessary to determine the value of the investor’s interest, which the investor will likely provide to its own independent valuation expert. Third, they need to decide who pays the costs for the experts. Often, the company will prepare the first valuation at its sole cost, but if the minority investor then wants to secure a separate valuation, that comes at the expense of the investor. If there is a third valuation, the cost of the third valuation expert is shared equally by the parties. Finally, if there are disputes over the valuation, this is where the arbitration provision will specify how any/all disputes will be resolved promptly and efficiently.
Conclusion
The business divorce process can be frustrating, particularly when valuation disputes arise, but these conflicts can be anticipated, and they should not derail the parties’ efforts to achieve their desired business separation. The key is to be proactive. Business partners need to agree in advance on an approach to valuation before disputes take hold, because once they are in conflict, it will be extremely difficult for them to reach consensus on any form of resolution. If the partners plan ahead and implement one of the practical paths to resolution reviewed above — averaging expert reports, adopting a base value/earn out structure, or implementing a targeted arbitration — they will have a much better chance to avoid singing the valuation blues.
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Healthcare Preview for the Week of: June 16, 2025
Short, Significant Senate Week
The House is out this week for the Juneteenth holiday, but the Senate will be in town through Wednesday. We expect these three days to be significant because the Senate Finance Committee has announced that it intends to release its reconciliation text today. The Finance Committee has jurisdiction over some of the most controversial provisions, including Medicaid, the Affordable Care Act (ACA), Medicare, and taxes. While we are focused on the health provisions, it is important to remember that reconciliation is mainly a tax bill, and much debate is focused on the tax provisions. Last week, the Senate Health, Education, Labor, and Pensions Committee released its text, which included one ACA provision that mirrors the House-passed language to fund cost-sharing reduction payments for Marketplace plans, with strict limitations against those funds going to plans that cover abortions. The Finance Committee text will likely include additional ACA provisions like those included in H.R. 1 as it passed the House. The committee may also make substantive changes to the House-passed Medicaid provisions.
One important caveat is that the Finance Committee language is likely to have gaps and placeholders for language that is still being developed or negotiated, and any provision is subject to change. Senate language also must comply with the Byrd rule to enable Senate passage by a simple majority, so additional modifications may be made via that process as well.
Republican leadership set July 4, 2025, as the target date to send the bill to President Trump’s desk. That leaves three weeks, one of which is supposed to be a congressional recess week, to pass the bill in the Senate and send it back to the House for its consideration. Senate Majority Leader Thune (R-SD) indicated he’d like the Senate to vote on the package the week of June 23, 2025, to meet this timeline. As the Senate modifies language to win votes from Republicans who have expressed concerns, it will have to be careful to ensure that the changes will be able to pass the House.
Given all of these complicating factors, the timeline could slip as negotiations and the Byrd rule process continue. Because Republicans aim to address the debt limit in reconciliation, the more significant deadline to sign the bill into law is by the August recess, which is when the US Department of the Treasury expects the United States to reach the debt limit.
Anzeigen Digital – BaFin Ermöglicht Zukünftig Digitale Anzeigen zu Geldwäschebeauftragten
Die Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) öffnet ihr Portal der Melde- und Veröffentlichungsplattform (MVP-Portal) zukünftig auch für geldwäscherechtliche Anzeigen.Konkret betrifft dies alle im Voraus anzeigepflichtigen Sachverhalte rund um den Geldwäschebeauftragten und dessen Stellvertreter, also:
• die Bestellung;• etwaige Änderungen (z.B. Kontaktdaten);• die Entpflichtung.
Zur Vornahme von Anzeigen auf diesem digitalen Weg bedarf es lediglich einer Registrierung auf dem MVP-Portal und einer Zulassung zum sog. „Fachverfahren‚ Geldwäscheprävention und Terrorismusfinanzierung“. Die digitale Anzeige soll voll wirksam sein und eine Übersendung per Post ist zukünftig nicht mehr erorderlich. Das neue Verfahren steht allen Verpflichteten, die unter Aufsicht der BaFin stehen, seit dem 13. Juni 2025 offen.
FCA Consults on Proposals for Stablecoin Issuance and Cryptoasset Custody
The UK Financial Conduct Authority (the FCA) recently published two consultations: CP25/14 on stablecoin issuance and cryptoasset custody (CP25/14), and CP25/15 on prudential requirements for cryptoasset firms (CP25/15, and together with CP25/14, the Consultations).
The Consultations are the latest milestone in the FCA’s roadmap for cryptoasset regulation. They build on HM Treasury’s draft legislation published in April 2025, which will bring certain cryptoasset-related activities within the UK regulatory perimeter. Further details on the draft legislation can be found in our previous update (available here).
Scope of the Consultations
The Consultations focus on “qualifying” stablecoins (i.e., cryptoassets that aim to maintain a stable value by referencing at least 1 fiat currency) and related activities. Issuing such stablecoins and custody of qualifying cryptoassets will become regulated activities requiring FCA authorisation when conducted by way of business in the UK.
CP 25/14
In CP 25/14, the FCA seeks views on its proposed rules and guidance for the activities of issuing a qualifying stablecoin and safeguarding qualifying cryptoassets. The proposals aim to ensure regulated stablecoins maintain their value and require customers to be provided with clear information on how the assets backing an issuance of qualifying stablecoins are managed.
Among other things, CP25/14 covers the following proposals:
Authorisation. Firms carrying out the new regulated activities must be authorised under Part 4A of the Financial Services and Markets Act 2000;
Full Reserve Backing. Stablecoin issuers must fully back their tokens with high-quality, low risk, liquid assets equal in value to all outstanding stablecoins. These backing assets must be held in a statutory trust and managed by a separate, independent custodian. Reserves are limited to low-risk instruments with only limited use of longer-term public debt or certain money-market funds;
Redemption rights and transparency obligation. Stablecoin holders must have the legal right to redeem qualifying stablecoins at par value on demand directly. The payment order of redeemed funds must be placed by the end of the business day following receipt of a valid redemption request; and
No interest to holders. Firms cannot pass through to stablecoin holders any interest earned on the reserve assets.
CP 25/15
In CP 25/15, the FCA seeks views on its proposed prudential rules and guidance for firms issuing qualifying stablecoins and safeguarding qualifying cryptoassets, including financial resource requirements.
Parts of the proposed prudential regime will be placed in a new proposed integrated prudential sourcebook (COREPRU), while sector-specific prudential requirements for firms undertaking regulated cryptoassets activities will be set out in a new CRYPTOPRU sourcebook.
Notably, the key proposals in CP 25/15 cover the following areas:
Capital requirements. The FCA proposes a minimum own-funds requirement for so-called “CRYPTOPRU Firms” that will require them to hold as own funds the higher of:
a permanent minimum requirement (i.e., £350,000 for issuing qualifying stablecoins or £150,000 for safeguarding of qualifying cryptoassets);
a fixed overhead requirement based on annual expenditure; or
a variable activity-based “K-factor” requirement.
Liquidity requirements. Firms must hold a minimum amount of liquid assets. There will be a basic liquid assets requirement for all CRYPTOPRU firms, and an issuer liquid asset requirement for those that issue qualifying stablecoins.
Concentration risk. Firms will be required to monitor and control for concentration risk, to ensure that they are not overly exposed to one or more counterparties or asset types.
Next Steps
The Consultations close on 31 July 2025. The FCA will consider any feedback before publishing its final rules, which are expected in 2026.
CP 25/14 and CP25/15 are available here and here, respectively.
Leander Rodricks, trainee in the Financial Markets and Funds practice, contributed to this article.