United States (US) – Global Investment Law Watch

United States: SEC’s Division of Corporation Finance Clarifies That Participation in Certain Proof-Of-Stake Activities Does Not Require SEC Registration

Jun 03 2025

By: Richard F. Kerr, Keri E. Riemer, and Caroline N. Roethlisberger

On 29 May 2025, the SEC’s Division of Corporation Finance (the Division) issued a guidance statement (Statement) related to certain protocol staking activities. The Statement addresses the impact of federal securities laws on staking of crypto assets on networks that use proof-of-stake (PoS) as a consensus mechanism (PoS Networks). Such activity is referred to as “Protocol Staking” and such assets, “Covered Crypto Assets.”

Specifically, the Division stated that (i) staking Covered Crypto Assets on a PoS Network; (ii) the activities undertaken by third parties involved in the Protocol Staking process (including third-party node operators, validators, custodians, delegates and nominators); and (iii) providing certain ancillary services related to Protocol Staking in the manner described in the Statement do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the Securities Act) or Section 3(a)(10) of the Securities Exchange Act of 1934 and, therefore, do not need to register under the Securities Act, or fall within an exemption from registration.

The Statement provides guidance solely with respect to Protocol Staking activities undertaken in connection with self (or solo) staking, self-custodial staking directly with a third party and through custodial arrangements. The Statement does not cover instances where a custodian selects whether, when, or how much of an owner’s crypto assets to stake.

With respect to ancillary services, the Statement provides that service providers—including custodians—may engage in activities that are ministerial or administrative in nature, including providing slashing coverage, early unbonding, alternate rewards payment schedule and amounts, and the aggregation of crypto assets.

The Statement follows recent guidance from the Division providing greater clarity on the application of the federal securities laws to digital assets, including an FAQ that addresses broker-dealer custody of digital assets.

United States: Department of Labor ESG and Cryptocurrency-Related Matters

Jun 03 2025

By: Robert L. Sichel, Ruth E. Delaney, William P. Wade, and Lael R. Franco

The Department of Labor will engage in new rulemaking to replace Biden era regulations labeled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” that allowed plan fiduciaries may consider ESG factors when choosing ERISA retirement plan investments. The Department announced its intention in a filing to the Fifth Circuit Court of Appeals in connection with a legal challenge to the regulations.

United States: Wiretaps in the Web Code? The Asset Management Pixel Litigation Explained

May 28 2025

By: Michael J. Stortz and Jake Bernstein

Earlier this month, two investors filed a putative class action challenging the deployment of third-party tracking tools—including the Meta Pixel, LinkedIn Insight Tag, and Google Analytics—on the website and mobile app of a major asset management firm.

United States: SEC’s Division of Trading and Markets Issues Crypto Asset-Related FAQs (And Withdraws Previous Guidance)

May 20 2025

By: Keri E. Riemer, Richard F. Kerr, and Caroline N. Roethlisberger

On 15 May 2025, the US Securities and Exchange Commission’s Division of Trading and Markets (Division) released Frequently Asked Questions (FAQs) clarifying how certain broker-dealer and transfer agency rules relate to crypto asset activities. On the same day, the Division and FINRA’s Office of General Counsel withdrew their 8 July 2019 Joint Statement on Broker-Dealer Custody of Digital Asset Securities.

United States: Y’all Street to Attract Business With “Pro-growth” Legislation

May 16 2025

By: Jessica D. Cohn, Robert H. McCarthy Jr., and Yonathan Y. Tewelde

Growing corporate and financial industry interest in Texas as a viable alternative to Delaware for incorporation is creating a trend, which is being called “Dexit.”

United States: The SEC Takes Another Key Step Toward Crypto Clarity

Apr 14 2025

By: Keri E. Riemer, Richard F. Kerr, and Caroline N. Roethlisberger

On the heels of other guidance issued by the US Securities Exchange Commission’s (SEC) Division of Corporation Finance (Division), the Division released a statement (Statement) on 10 April 2025 addressing its views about, among other things, certain disclosure requirements for certain registration forms under the Securities Act of 1933, including Form S-1, and registration forms under the Securities Exchange Act of 1934, including Form 10. As Form S-1 is used by commodity based exchange-traded products (ETPs), including spot bitcoin and ether ETPs, the Division’s guidance will impact such ETPs and others that follow a similar registration path.

United States: SEC Appears Poised to Bolster Competition on “Y’all Street”

Apr 10 2025

By: Jessica Cohn and Caroline Roethlisberger

On 4 April 2025, the Securities and Exchange Commission (SEC) published Texas Stock Exchange’s (TXSE) Form 1 Application and Exhibits, indicating that the SEC intends to grant TXSE’s registration as a national securities exchange. The application provides new details about TXSE, including its proposed listing standards and requirements and the technology to be utilized. TXSE has previously announced that it expects to receive that necessary SEC approval and be listing companies and funds on its exchange by early 2026.

United States: Staff Cedes Jurisdiction Over Certain Stablecoins

Apr 07 2025

By: Cheryl L. Isaac, Richard F. Kerr, Sarah V. Riddell, and Keri E. Riemer

On 4 April 2025, the SEC’s Division of Corporation Finance (Division) issued a statement (Statement) providing that the offer and sale of certain “Covered Stablecoins” do not involve the offer and sale of securities within the meaning of federal securities laws. As such, persons involved in the process of offering, selling and redeeming Covered Stablecoins are not required to register those transactions with the SEC or rely on an exemption from registration.

United States: House Committee on Financial Services Urges the SEC to Withdraw Final and Proposed Rules

Apr 01 2025

By: Lance C. Dial and Donela M. Qirjazi

On 31 March 2025, the House Committee on Financial Services (Committee), in a letter to Acting Chairman of the US Securities and Exchange Commission (SEC), Mark Uyeda, identified a series of proposed and adopted rules that the SEC should withdraw or rescind. The letter notes the Committee’s view that the SEC, under the prior Chair, had lost sight of its mission. The identified proposals and rules represent significant rulemaking efforts on the part of the SEC, many of which were controversial and subject to significant industry opposition. The specific proposals identified are the following:

United States: New Kid on Y’all’s Block

Mar 13 2025

By: Stacy L. Fuller, Kevin R. Gustafson, Richard F. Kerr, Jessica D. Cohn, and Christine Mikhael

On 31 January 2025, the Texas Stock Exchange LLC (TXSE) filed a registration statement with the US Securities and Exchange Commission (SEC) to operate as a fully electronic, national securities exchange.

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