Sabal Law Week in Review: August 15–21, 2025
Catch up on this week’s key legal and regulatory updates impacting startups, funds, and emerging tech. Sabal Law breaks it down:
Private Fund Fee Violations: TZP Management settled SEC charges for $683K over undisclosed conflicts in fee offset practices, violating Advisers Act Section 206(2). Notably, Section 206(4) and Rule 206(4)-8 weren’t charged, a potential enforcement signal. A 2007 concurrence in the rule’s adopting release by then-Commissioner Atkins in which he advocated for proving scienter, suggests the SEC may reserve 206(4)-8 for more egregious cases. Additionally, TZP was an RIA and a Rule 206(4)-7 Compliance Rule violation could have been charged as well because either TZP had no policy on point for management fee offsets or it did not implement the policy it did have.
Closed-End Fund Shift: SEC eases rules for registered closed-end funds of private funds (CE-FOPFs), dropping the de facto rule requiring the registrant to limit its private fund investments to less than 15 % of asset or require both accredited investor status and minimum investment amounts. Likely part of the push to increase access to alts.
Fed Ends Crypto Program: Federal Reserve sunsets its crypto/FinTech supervision program, integrating oversight into standard processes. Reflects reduced scrutiny under Trump policies, easing bank engagement with digital assets.
Japan’s Stablecoin Push: Japan’s FSA may approve a yen-backed stablecoin by JPYC this fall, signaling global regulatory momentum for digital assets and FinTech innovation.
China’s Stablecoin Plan: China plans yuan-backed stablecoins to boost global currency use, reversing its 2021 crypto ban. Geopolitical pressures likely causing policy shift.
NFL-Microsoft AI Deal: NFL extends Microsoft partnership, deploying Copilot for real-time game analytics and operations. Enhances SportsTech efficiency for coaches and teams . SportsTech is expected to continue growth.
CalPERS Sells PE Stakes: CalPERS shops $3B in legacy private equity stakes, targeting better performance via secondaries. Bids due this week, closing by September. The secondaries market is putting out mixed signals. See below.
PE Continuation Vehicles: PE firms like Bain Capital use continuation vehicles and CV-squareds for liquidity, with new loans against commitments. Investors scrutinize conflicts and valuations, impacting allocators and family offices frustrated with legacy assets & no exits.
Neuberger Berman’s $5B Fund: Neuberger Berman targets $5B for a PE secondaries fund, capitalizing on liquidity needs amid a deal drought. Performance lags with 9.1% IRR in 2024, down from 49.1% in 2021. But see next bullet.
PE Exits Rebound: North American PE exits hit $644.4B in 2025, driven by IPOs like Venture Global ($58B). Europe lags with €8.3B in IPOs, highlighting regional disparities for private equity. Will reliance on secondaries and CVs slow in North America? Bain & Neuberger are placing bets despite signs of rebound.
Gemini IPO: Gemini files for IPO, despite $282.5M losses in H1 2025. Follows Circle and Bullish, signaling FinTech and crypto market momentum.
CFTC Crypto Sprint: CFTC’s Acting Chairman Pham launches stakeholder engagement for spot crypto trading, aligning with Trump’s pro-crypto policies and GENIUS Act.
Stablecoin Loophole Debate: Crypto groups push back on banks’ claims that GENIUS Act allows interest on stablecoins, arguing it fosters innovation.
Anchorage Order Lifted: OCC ends 2022 consent order against Anchorage Digital for AML deficiencies, affirming crypto banks’ compliance progress. Sabal Law is here to help with AML compliance and remediation.
Kanye’s YZY Token Risks: Kanye West’s YZY token on Solana surges 881% but raises concerns with a class action waiver and insider buying. Liquidity and “rug-pull” risks flagged.
ICYMI:
FOMC Signals Caution: July meeting minutes released on August 20. Fed holds rates at 4.25–4.5%, citing tariff-driven inflation risks and a slowing labor market. Two governors dissented, favoring a 25bps cut.
Perplexity’s Chrome Bid: Perplexity offers $34.5B for Google’s Chrome, promising to keep Chromium open-source. Supports assertion by some that primary use-case of AI as a better mousetrap for search in AI’s current form. That will change, though.
VC Down Rounds Surge: 15.9% of 2025 VC deals are down rounds, with IPOs like Chime ($9.1B from $25B) reflecting lower valuations. Bloomberg notes IPOs are <3% of PE exits.
AI VC Dominance: AI deals claim 64.1% of U.S. VC value in 2025, with Series B AI startups at 2.1x valuation step-up vs. 1.4x for others.
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