Securities Regulation Daily Wrap Up, WORTH NOTING—Other litigation, regulatory activity and industry news, (Apr 4, 2025)

By WK Editorial Staff

A weekly roundup of other items of interest to the securities, commodities, and corporate governance communities.

SEC NEWS AND SPEECHES—In a new major organizational change, the SEC reportedly told staff that enforcement and exams divisions will report to new deputy directors as of April 9. According to Reuters, enforcement staff will report to deputy directors for the West, Northeast or Southeast as well as a deputy director for specialized units. Currently the SEC has one deputy director for the enforcement division and 10 hubs across the country where enforcement and exam staff report up to a director of each office. The announcement comes during a reported exodus of hundreds of staff and elimination of regional directors. Reuters also reported that the SEC’s top two leaders of the FCPA unit are leaving the agency. According to Bloomberg, the DOGE team implementing SEC organizational changes is being led by Eliezer Mishory, who until recently was the chief regulatory officer of derivatives exchange Kalshi Inc.

BLOCKCHAIN—President Donald Trump reportedly pardoned the BitMEX cryptocurrency exchange, along with its three top executives and a business manager, of criminal convictions relating to the Bank Secrecy Act. According to CNBC, BitMEX co-founders Arthur Hayes, Benjamin Delo and Samuel Reed, and former head of business development Gregory Dwyer received pardons on March 27. DOJ announced January 15, 2025 that BitMEX was sentenced to a fine of $100 million for violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering (AML) and know-your-customer (KYC) program. The individuals entered guilty pleas for violating the Bank Secrecy Act and were sentenced in 2022. BitMEX was also previously fined $100 million by the CFTC and the three cofounders agreed to pay a penalty of $10 million each.

BLOCKCHAIN—CFTC staff withdrew a 2018 advisory on virtual currency, Staff Advisory No. 18-14, Advisory with Respect to Virtual Currency Derivative Product Listings. The advisory provided guidance to exchanges and clearinghouses on certain enhancements when listing a derivative contract based on virtual currency pursuant to Commission Regulations 40.2 (self-certification) or 40.3 (voluntary submission for Commission review and approval). Staff believe the advisory is no longer necessary given staff experience and increasing market growth and maturity. The withdrawal was issued March 27, 2025 by the Divisions of Market Oversight and Clearing and Risk in CFTC Letter No. 25-07, effective immediately.

BLOCKCHAIN—In Staff Advisory No. 23-08, the CFTC’s Division of Clearing and Risk (DCR) has withdrawn Staff Advisory No. 23-07, which previously emphasized risk considerations for digital asset clearing. The withdrawal ensures that digital asset derivatives are treated consistently with other financial products under regulatory supervision. Despite this change, the DCR will continue overseeing financial integrity and systemic risk while encouraging open communication with market participants.

ALTERNATIVE INVESTMENT FUNDS—Investors should have more access to private markets, said BlackRock Chairman Larry Fink in his 2025 Annual Chairman’s Letter to Investors. “Unlocking” private markets would provide “great benefits” like inflation protection, stability, and higher returns while also providing much-needed capital to governments and companies. While investors have historically been restricted from private markets due to risk, illiquidity, and complexity, Fink said “clearer and more timely data” will make these markets accessible and simpler by indexing them like the S&P 500. He said that three BlackRock acquisitions will give clients more access to private markets: Preqin, a leading data firm in private markets; HPS Investment Partners, a premier manager of private credit; and Global Infrastructure Partners (GIP). Fink also floated measures to “democratize investing,” including tokenizing financial assets, boosting investors’ emergency savings through philanthropic programs, helping small businesses offer 401(k) plans, and opening investment accounts for every American at birth.

INVESTOR EDUCATION—Investors support the overall U.S. economy while preparing for their own financial future, SEC Acting Chairman Mark Uyeda said in a statement observing April’s Financial Literacy Month. By providing capital to businesses, investors play a role in capital formation and help power the innovation-based U.S. economy. The SEC’s Office of Investor Education and Advocacy (OIEA) highlighted free saving and investing tools and resources available on Investor.gov including “Ten Investment Tips for 2025 Investor Bulletin and “Ten Building Blocks to Building Wealth.”

EXCHANGES AND MARKET REGULATION—NYSE Texas officially opened in Dallas as the first securities exchange to operate in Texas, according to a press release. The new exchange announced that its first listing is President Donald Trump’s company Trump Media & Technology Group (DJT). The New York Stock Exchange and Intercontinental Exchange, Inc. announced in February that NYSE Chicago would reincorporate in Texas and be renamed NYSE Texas. NYSE Group President Lynn Martin said the move “will allow companies to capitalize on the pro-business dynamics in Texas.”

CFTC NEWS AND SPEECHES—Rahul Varma has been appointed as the Acting Director of the CFTC Division of Market Oversight (DMO). CFTC Acting Chairman Caroline D. Pham praised Varma's extensive experience, noting his decade-long tenure at the CFTC. Varma played a key role in establishing the Market Intelligence Branch in 2017 and later became Deputy Director for both the Market Intelligence and Product Review branches in 2024.

LAW FIRM NEWS—Former CFTC Enforcement Director Ian McGinley joined Sidley as a Securities Enforcement and Regulatory partner in the Regulatory and Enforcement practice group in New York. He will focus on regulatory enforcement and white-collar criminal defense, with a particular emphasis on commodities and securities laws. He will also advise clients in civil and criminal matters involving digital assets.

LAW FIRM NEWS—Hogan Lovells announced that former Senator Kyrsten Sinema (I - AZ) joined the firm’s Global Regulatory & IP practice group in the Washington, D.C. office. Senator Sinema’s Chief of Staff Daniel Winkler will also be joining the firm as a policy advisor. “Hogan Lovells has long been known as a firm that operates at the intersection of business and government,” said CEO Miguel Zaldivar. “Senator Sinema brings more than a decade of experience in legislative affairs and a unique ability to foster cooperation across the political landscape.”

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