Sabal Law Week in Review: December 5–11, 2025
Catch up on this week’s key legal and regulatory updates impacting startups, funds, and emerging tech. Sabal Law breaks it down:
Traditional Finance
Research Analyst Settlement Amended. SEC terminates decades-old Global Research Settlement restrictions, relying instead on FINRA Rule 2241’s principles-based conflict management and Regulation AC disclosures to boost sell-side coverage, especially for smaller issuers.
Allianz Structured Alpha Fraud Closed. SEC secures final judgments against three former portfolio managers who misled investors about downside risks in a $11 billion options strategy; disgorgement totals over $32 million deemed satisfied by parallel criminal forfeitures and permanent industry bars imposed.
NY LLC Transparency Act Takes Effect Jan 1. New York’s state-level beneficial ownership reporting regime (mirroring federal CTA definitions) launches; currently applies only to foreign LLCs registered in NY, but pending legislation would expand to all NY-formed and qualified LLCs with 2026 filing deadlines.
High-Leverage ETF Plans Halted. SEC blocks nine proposed 3x and 5x leveraged ETFs (including single-stock and crypto products) that would exceed the 200% exposure limit, citing inadequate risk measurement against reference assets.
Evergreen Funds Gain Traction. Wealth platforms rapidly adopt semi-liquid interval funds, tender-offer funds, and non-traded BDCs to meet surging retail demand for private credit, private equity, infrastructure, and real estate exposure.
401(k) Alternatives Guidance Coming. DOL plans 2026 guidance on alternative assets in 401(k)s (including private markets and crypto) and a new fiduciary rule; retirement income solutions increasingly qualify as QDIA-eligible.
GenAI Risks Flagged by FINRA. 2026 Oversight Report urges firms to implement enterprise-level supervision, testing, and cybersecurity controls for generative AI tools and autonomous AI agents.
Digital Assets
CFTC Launches Tokenized Collateral Pilot. Acting Chair Pham green-lights bitcoin, ether, and USDC as margin collateral for derivatives; issues guidance for tokenized RWAs (Treasuries, MMFs) and withdraws outdated 2020 virtual-currency advisory.
First CFTC-Regulated Spot Crypto Market Launches. Bitnomial rolls out spot trading in bitcoin and ether on a fully regulated DCM/DCO platform, enabling portfolio margining across spot, futures, perpetuals, and options.
BlackRock Files Staked ETH ETF. New iShares Staked Ethereum ETF (ticker ETHB) would stake 70-90% of holdings and distribute quarterly yields while trading on Nasdaq alongside existing spot ETH ETF.
Banks Authorized for Riskless Principal Crypto Trades. OCC Interpretive Letter 1188 confirms national banks may intermediate crypto transactions on a matched-principal basis without taking inventory, treating them like traditional brokerage activity.
Citadel Urges SEC to Regulate DeFi as Exchanges. Citadel Securities pushes for no broad exemptive relief for DeFi protocols handling tokenized securities, arguing many already meet statutory exchange and broker-dealer definitions; crypto community calls proposal unworkable.
Paxful Fined $3.5 Million by FinCEN. Peer-to-peer crypto platform admits willful BSA violations, including failure to register as MSB, implement AML program, or file SARs on over $500 million of suspicious transactions linked to sanctioned jurisdictions and illicit sites.
Tempo Payments Blockchain Testnet Live. Stripe- and Paradigm-backed Tempo launches public testnet for its Ethereum-compatible L1 optimized for instant stablecoin settlement and low fees; design partners include Kalshi, Mastercard, and UBS, with Klarna already issuing KlarnaUSD on the network.
SEC Chairman Signals ICO Relief. Chairman Paul Atkins states that ICOs for network tokens, digital collectibles, and digital tools fall outside SEC jurisdiction under his new token taxonomy, leaving most token sales to lighter-touch CFTC oversight while the agency focuses solely on tokenized securities.
After-Hours Bitcoin ETF Filed. Tidal Trust proposes the Nicholas Bitcoin Treas AfterDark ETF, which would hold bitcoin exposure only outside U.S. trading hours and switch to short-term Treasuries during the day to capture bitcoin’s historically stronger overnight performance.
Circle Launches Privacy USDC for Banks. Circle introduces USDCx, a 1:1 USDC-backed stablecoin on privacy-focused Aleo blockchain using zero-knowledge proofs to shield transaction details while preserving regulator-accessible compliance records for institutional users.
ICYMI
Fanatics Launches Prediction Market. Fanatics Markets (powered by Crypto.com Derivatives North America) rolls out CFTC-regulated event contracts on sports, finance, economics, and politics in 24 states; Phase Two in 2026 will add crypto, pop culture, and other categories.
CNBC Partners with Kalshi. Multi-year deal integrates Kalshi’s prediction market data into CNBC programming and digital platforms starting 2026, with real-time tickers and dedicated market pages.
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