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If the SEC were to change the FPI definition substantially, it could have significant consequences for a potentially large number of foreign issuers.

Overview

On June 4, 2025, the U.S. Securities and Exchange Commission (SEC) issued a concept release[1] requesting public comment on the definition of “foreign private issuer” (FPI).[2] This move comes in response to significant shifts in the FPI landscape, including changes in the jurisdictions of incorporation and headquarters of many FPIs, and a marked increase in the number of FPIs whose securities are traded almost exclusively in U.S. markets. The SEC is considering whether the current FPI definition and related regulatory accommodations remain fit for purpose, or whether updates are needed to better align with today’s global capital markets and to ensure appropriate investor protections. If the SEC were to change the FPI definition substantially, it could have significant consequences for a potentially large number of foreign issuers.[3]

As a concept release, this is the first step in a SEC rulemaking process that potentially could lead to the publication of proposed rules and possibly the adoption of final rules. Foreign issuers accessing or seeking to access the U.S. capital markets should monitor the SEC’s process and consider whether changes to the FPI definition will affect their ability to qualify for FPI status or affect the disclosure and reporting accommodations currently available to FPIs.

Background: The FPI Framework and Its Evolution

The SEC established the initial regulatory framework for foreign issuers in 1935[4] and conducted its latest review in 2008,[5] when there were approximately 900 FPIs.[6] As of 2023, there were approximately 1,100 FPIs.[7]

The FPI regulatory framework was established to recognize the unique challenges foreign issuers face when accessing U.S. capital markets and becoming subject to different and sometimes competing legal and accounting reporting requirements in their home country and the United States.[8] To mitigate this effect, the SEC allowed foreign companies with a sufficient nexus to a foreign home country jurisdiction to qualify as an FPI and granted such FPIs a range of accommodations from U.S. securities laws. These accommodations for FPI registrants include the use of specialized registration and reporting forms, less frequent reporting (with interim reporting on Form 6-K consisting of disclosure required by the issuer’s home country or any stock exchange on which the issuer is listed, or any other disclosure distributed to the issuer’s securityholders),[9] more flexible accounting standards, and exemptions from certain other rules such as the U.S. proxy rules, Regulation FD and Section 16 reporting, and short-swing profit liability.[10]

The current FPI definition was first adopted in 1983 and last amended in 1999,[11] and is based on a combination of U.S. ownership thresholds, and percentages of U.S. management control, U.S. business assets and business contacts with the United States.[12]

In the case of an existing registrant, FPI eligibility is determined annually as of the end of a foreign issuer’s second fiscal quarter.[13] A foreign issuer filing an initial registration statement under the Securities Act of 1933 or the Securities Exchange Act of 1934 determines its FPI status as of a date within 30 days prior to filing.[14]

Historically, the SEC’s FPI framework was based on the expectation that FPIs would be subject to meaningful disclosure and regulatory oversight in their home countries, and that their securities would primarily trade in foreign markets. However, the data derived from the SEC’s recent review of the composition of the current FPI population indicates that these assumptions may no longer hold true for a significant portion of the FPI population.[15]

Key Developments in the FPI Population

Jurisdictional Shifts: There has been a dramatic change in the jurisdictions of incorporation and headquarters among FPIs. The Cayman Islands is now the most common place of incorporation, while mainland China is the most common headquarters location. Many FPIs are now incorporated in jurisdictions with limited disclosure requirements, while their operations are based elsewhere.
Divergence Between Incorporation and Headquarters: The proportion of FPIs with different jurisdictions for incorporation and headquarters has risen sharply, from 7% in 2003 to 48% in 2023. This trend is particularly pronounced among China-based issuers, many of which are incorporated in the Cayman Islands or British Virgin Islands but are headquartered and operate primarily in China.
Increased Reliance on U.S. Markets: A majority of FPIs now have their equity securities traded almost exclusively in U.S. capital markets. In 2023, 55% of the FPIs that filed Forms 20-F had at least 99% of their global trading volume in the United States, up from 44% in 2014. These FPIs tend to be smaller in market capitalization but represent a growing share of the FPI population by number.
Regulatory Arbitrage Concerns: The SEC notes that some FPIs may be seeking to minimize regulatory costs by incorporating in jurisdictions with minimal disclosure requirements while listing primarily in the United States, potentially reducing the information available to U.S. investors and raising questions about the adequacy of investor protections.

Members of Congress and other stakeholders beyond the SEC have questioned whether the present regime creates an uneven playing field for certain foreign companies relative to U.S. reporting companies who are not able to benefit from the same accommodations, and have proposed legislation aimed at curbing perceived abuses.[16]

Potential Regulatory Responses Under Consideration

The SEC is seeking feedback on a range of possible approaches to updating the FPI definition and related accommodations, including:

Updating Existing Eligibility Criteria
- Lowering the U.S. ownership threshold or revising the business contacts test to better capture issuers with significant ties to the United States.

Introducing a Foreign Trading Volume Requirement
- Requiring FPIs to maintain a minimum percentage of trading volume outside the United States to retain FPI status.
- The SEC is considering various thresholds (e.g., 1%, 3%, 5%, 10%, 15%, 50%) and has provided data on how many current FPIs would be affected at each level.

Requiring Listing on a Major Foreign Exchange
- Mandating that FPIs be listed on a “major” foreign exchange, with the SEC defining which exchanges qualify based on criteria such as market size, governance standards, and disclosure requirements.

SEC Assessment of Foreign Regulation
- Limiting FPI status to issuers incorporated or headquartered in jurisdictions with robust regulatory and oversight frameworks, as determined by the SEC.

Mutual Recognition Systems
- Expanding mutual recognition arrangements (similar to the U.S.-Canada MJDS[17]) to other jurisdictions with comparable investor protection standards.

International Cooperation Arrangement Requirement
- Conditioning FPI status on the issuer’s home country securities authority being a signatory to international information-sharing agreements, such as the International Organization of Securities Commissions Enhanced Multilateral Memorandum of Understanding Concerning Consultation, Cooperation, and the Exchange of Information.[18]

Business Implications

Regulatory Uncertainty: Companies currently relying on FPI status—especially those incorporated in jurisdictions with limited disclosure requirements or trading primarily in the United States—face potential changes to their reporting obligations and compliance costs.
Competitive Dynamics: The SEC is considering whether the current framework creates an uneven playing field between domestic issuers and FPIs, particularly those with limited home country oversight.
Market Access: Changes to the FPI definition could prompt some issuers to reconsider their U.S.listings or seek alternative markets, potentially impacting U.S. investor access to foreign securities.
Transition and Compliance: The SEC is seeking input on transition periods, potential accommodations for affected issuers, and the costs and complexities of moving from IFRS or home country GAAP to U.S.GAAP.

Commissioners Comments

Below are links to the full statements of several SEC Commissioners regarding the concept release and potential changes to the FPI definition:

Next Steps

Businesses with cross-border operations, FPI registrants in the United States (including those with classes of securities listed on a U.S. stock exchange), and investors in FPI securities should closely monitor this process and consider participating in the comment period to help shape the future regulatory landscape for FPIs.

The SEC is inviting comments on all aspects of the FPI definition and potential regulatory responses, including the costs, benefits, and competitive impacts of any changes. Comments are due within 90 days of publication in the Federal Register. Comments may be submitted: (1) using the SEC’s comment form at https://www.sec.gov/rules/submitcomments.htm; (2) via e-mail to rule-comments@sec.gov (with “File Number S7-2025-01” on the subject line); or (3) via mail to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number S7-2025-01.

[1]  Concept Release on Foreign Private Issuer Eligibility, Release Nos. 33-11376; 34-103176 (June 4, 2025), available at https://www.sec.gov/files/rules/concept/2025/33-11376.pdf.

[2]  A “foreign private issuer” is currently defined as a foreign issuer (i.e., an issuer which is a foreign country, a national of any foreign country or a corporation or other organization incorporated or organized under the laws of any foreign country) other than a foreign government (i.e., the government of any foreign country or of any political subdivision of a foreign country) except an issuer that as of the last business day of its most recently completed second fiscal quarter has more than 50% of its outstanding voting securities directly or indirectly held of record by U.S. residents and for which any of the following is true: (i) a majority of its executive officers or directors are citizens or residents of the United States, (ii) more than 50% of its assets are located in the United States, or (iii) its business is administered principally in the United States. See 17 CFR § 230.405; 17 CFR § 240.3b-4.

[3]  As used herein, any reference to a “foreign issuer” means an entity, other than a foreign government, organized under the laws of any non-U.S. jurisdiction.

[4]  See supra note 1, n.13.

[5]  See Foreign Issuer Reporting Enhancements, Release No. 33-8959 (Sept. 23, 2008) [73 FR 58300 (Oct. 6, 2008)], available at https://www.sec.gov/files/rules/final/2008/33-8959fr.pdf.

[6]  See Evan Avila and Mattias Nilsson, Trends in the Foreign Private Issuer Population 2003-2023: A Descriptive Analysis of Issuers Filing Annual Reports on Form 20-F (Dec. 2024 (Revised May 2025)), available at https://www.sec.gov/files/dera_wp_fpi-trends-2412.pdf.

[7]  Id.

[8]  See supra note 1, n.13.

[9]  The reporting obligations of an FPI registrant are in contrast to the interim, quarterly and annual reporting requirements for non-FPI registrants, which are based on specific items of disclosure mandated in the relevant Form 8-K, Form 10-Q and Form 10-K. While both Nasdaq and the New York Stock Exchange require listed companies (including FPIs) to timely disclose any material information likely to affect the market price for their listed securities, those rules do not mandate the specific financial and other disclosure that would also apply to a non-FPI registrant that is required to file interim and quarterly reports on Form 8-K and Form 10-Q. For more details on the FPI reporting obligations, see Form 6-K, General Instructions, U.S. Securities and Exchange Commission (Revised February 2025), available at https://www.sec.gov/files/form6-k.pdf.

[10]  See supra note 1 at § II.B for an outline of the accommodations afforded to FPIs.

[11]  See supra note 1, n.101.

[12]  See supra note 2.

[13]  Id.

[14]  See supra note 1, n.101.

[15]  See supra note 1, at §§ II.A, and III.C.1.

[16]  See Holding Foreign Insiders Accountable Act, S. 2542, 118th Cong. (2024), available here; Press Release, Sen. Chris Van Hollen, Van Hollen, Kennedy Introduce Bipartisan Bill to Deter Executives of Foreign Companies from Insider Trading at the Expense of American Investors (June 13, 2024), available here.

[17] Notably, the concept release does not seek comments on the MJDS. Rather, the SEC appears to generally be positing the MJDS as a mutual recognition model to consider as an alternative.  See supra note 1, n.100.

[18]  See International Organization of Securities Commissions, Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (2016), available at https://www.iosco.org/about/pdf/Text-of-the-EMMoU.pdf.

The following Gibson Dunn lawyers prepared this update: J. Alan Bannister, Mellissa Campbell Duru, James J. Moloney, Eric Scarazzo, Rodrigo Surcan, and Chad Kang.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more, please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Capital Markets or Securities Regulation & Corporate Governance practice groups, or the following authors and practice group leaders:

Alan Bannister – New York (+1 212.351.2310, abannister@gibsondunn.com)

Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)

James J. Moloney – Orange County (+1 949.451.4343, jmoloney@gibsondunn.com)

Eric Scarazzo – New York (+1 212.351.2389, escarazzo@gibsondunn.com)

Rodrigo Surcan – New York (+1 212.351.5329, rsurcan@gibsondunn.com)

Chad Kang – Orange County (+1 949.451.3891, ckang@gibsondunn.com)

Capital Markets:

Andrew L. Fabens – New York (+1 212.351.4034, afabens@gibsondunn.com)

Hillary H. Holmes – Houston (+1 346.718.6602, hholmes@gibsondunn.com)

Stewart L. McDowell – San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Peter W. Wardle – Los Angeles (+1 213.229.7242, pwardle@gibsondunn.com)

Securities Regulation & Corporate Governance:

Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)

Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com)

James J. Moloney – Orange County (+1 949.451.4343, jmoloney@gibsondunn.com)

Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

We are pleased to provide you with the May edition of Gibson Dunn’s digital assets regular update. This update covers recent legal news regarding all types of digital assets, including cryptocurrencies, stablecoins, CBDCs, and NFTs, as well as other blockchain and Web3 technologies. Thank you for your interest.

ENFORCEMENT ACTIONS

UNITED STATES

SEC Drops Binance Suit
On May 29, the SEC and Binance filed a joint stipulation dismissing with prejudice the SEC’s lawsuit against the trading platform. The suit had been stayed at the SEC’s request while the agency’s crypto task force considers a new regulatory framework for digital assets. Binance stated that the dismissal “signals a global green light for responsible crypto innovation, boosting confidence from the U.S. to the EU and beyond.” Gibson Dunn represented Binance in this matter. Joint Stipulation; Law360; The Block.
SEC Charges Unicoin and Its Executives with $100 Million Fraud
On May 20, the SEC brought an enforcement action under the antifraud provisions of the federal securities laws against New York-based crypto project Unicoin, Inc., and three of its executives, in the U.S. District Court for the Southern District of New York. Unicoin and its executives allegedly made false and misleading statements by offering certificates that purportedly conveyed rights to Unicoin’s tokens and common stock. SEC; Complaint; The Block.
FTC and the State of Nevada Sue Online Crypto Trading Education Firm for $1.2 Billion Fraud Targeting Young Investors
On May 1, the Federal Trade Commission and the State of Nevada filed a complaint against an entity currently operating as IYOVIA and more broadly referred to as “IML.” IML offers educational courses in cryptocurrency trading but allegedly stole over a billion dollars from young investors through fraudulent courses. The company allegedly misrepresented how much both customers and salespeople could make, claiming its salespeople could make up to $750,000 per month, while knowing that just one in five earned more than $500 per month. FTC; Complaint; The Block.
Prosecutors Drop Money-Transmitter Charge Against Tornado Cash Developer
On May 15, the U.S. Attorney’s Office for the Southern District of New York pared back a charge for conspiracy to operate a money-transmitting business in its criminal case against Tornado Cash developer Roman Storm. Storm was charged in August 2023 with three counts: conspiracy to violate sanctions, conspiracy to commit money laundering, and conspiracy to operate an unlicensed money-transmitting business. The government had argued that the money-transmitting conspiracy could be proved through either evidence that Storm failed to comply with money-transmitting regulations or evidence that he transmitted funds known to be derived from a criminal offense. The government has dropped the former theory but continues to maintain the latter (along with the remaining counts). The decision comes in response to the April 7 memorandum from Deputy Attorney General Todd Blanche, which directed federal prosecutors to avoid “enforcement actions that have the effect of superimposing regulatory frameworks on digital assets.” Law360; SDNY Letter; Blanche Memo.
Judge Vacates Fraud and Manipulation Convictions Against Mango Markets Trader
On May 23, a federal judge in Manhattan overturned a jury verdict for charges of wire fraud, commodities fraud, and commodities manipulation against Avraham Eisenberg. Eisenberg had been convicted in April 2024 of manipulating the price of Mango Markets’ MNGO token in order to artificially inflate the value of his assets on the Mango Markets platform, allowing him to “borrow” money he did not intend to return. The court vacated the commodities fraud and commodities manipulation convictions for lack of venue, and entered a judgment of acquittal for the wire fraud charge due to insufficient evidence by the government that Eisenberg had made false statements. Eisenberg’s separate conviction for possession of child pornography was left in place. Law360; Opinion and Order.
New York Man Charged with Using Sham Blockchain Venture
On May 21, the Department of Justice and the SEC filed parallel criminal and civil actions against Jeremy Jordan-Jones, CEO of start-up Amalgam Capital Ventures LLC. Jordan-Jones had allegedly misrepresented his business to investors, raising $500,000 on the claim that it had developed a blockchain-based payment processing system, when Amalgam allegedly had not developed the technology. The U.S. Attorney’s Office for the Southern District of New York charged Jordan-Jones with fraud, false statements, and identify theft offenses; in a parallel action, the SEC sued Jordan-Jones under the antifraud provisions of the federal securities laws for making material misrepresentations to investors. DOJ; Indictment; SEC.
Former Celsius CEO Alex Mashinsky Sentenced to 12 Years in Prison for Crypto-Related Fraud
On May 8, Alex Mashinsky, the former CEO of the now-defunct crypto lender Celsius, was sentenced to 12 years in prison after he had pleaded guilty to fraud and market manipulation in the U.S. District Court for the Southern District of New York. According to the U.S. Attorney’s Office, Mashinsky defrauded Celsius investors by taking inappropriate risks with their funds, including by propping up the price of Celsius’ crypto-token CEL. DOJ.
DOJ Seizes $24 Million of Cryptocurrency from Developer of Qakbot Malware
On May 22, the Department of Justice unsealed an indictment against Qakbot developer Rustam Rafailevich Gallyamov and filed a civil forfeiture action against cryptocurrency tied to Qakbot. The Qakbot malware had allegedly been used to infect thousands of computers, allowing Gallyamov to sell access to those computers to various ransomware attackers. As part of the investigation, the FBI seized approximately $24 million in cryptocurrency generated through Qakbot’s allegedly criminal activity. CoinTelegraph; DOJ; Indictment; Complaint.
Superseding Indictment Adds 12 Defendants to RICO Conspiracy for $263 Million Scheme
On May 15, a superseding indictment was unsealed in the U.S. District Court for the District of Columbia adding twelve additional defendants to a RICO criminal charge originally brought against two individuals, Malone Lam and Jeandiel Serrano. The case, originally filed in September 2024, alleges a conspiracy to steal over $263 million worth of cryptocurrency, include over $230 million of Bitcoin from one victim in Washington, D.C., and then launder the proceeds. The defendants are charged with RICO conspiracy, conspiracy to commit wire fraud, money laundering, and obstruction of justice. DOJ 1; DOJ 2; Original Indictment.
Arrests Made in Kidnapping Attempt to Steal Cryptocurrency
On May 23, two people were arrested in New York City for the kidnapping and torture of an Italian tourist. The kidnappers were allegedly attempting to extort the tourist into turning over control of “millions of dollars” in cryptocurrency. The Block; NYT.

INTERNATIONAL

Argentinian President Milei Dissolved Investigation into LIBRA Scandal
On May 19, Argentinian President Javier Milei and Justice Minister Mariano Cúneo Libarona signed a decree dissolving a task force which was investigating the LIBRA cryptocurrency. LIBRA was originally promoted by Milei via social media as a “private project” to stimulate the Argentine economy. Milei’s promotion of LIBRA caused a scandal when the cryptocurrency reached a market valuation of more than $4.5 billion before soon losing nearly 90% of its value. Forbes; CoinDesk.
German Authorities Seize Over $38 Million from Now-Defunct Crypto Exchange Platform eXch
On May 9, the German Federal Criminal Police Office (BKA) announced that it had seized the server infrastructure of eXch, along with €34 million in Bitcoin, Ether, Litecoin, and Dash. The crypto exchange, which had been operating since 2014, enabled anonymous exchanges of crypto assets without any KYC measures or anti-money laundering protocols. German prosecutors said that the platform advertised this lack of measures on websites and other platforms of “criminal underground economy.” It is estimated that up to $1.9 billion has been moved through the exchange since its inception, in large part from criminal origins. The German authorities also claimed that a portion of the $1.4 billion in crypto stolen from Bybit earlier this year was laundered through eXch. BKA; The Block.

REGULATION AND LEGISLATION

UNITED STATES

Senate Advances GENIUS Act
On May 19, the Senate invoked cloture on the Guiding and Establishing National Innovation for U.S. Stablecoins (“GENIUS”) Act. The bill is the first comprehensive federal regulatory framework for stablecoins. The bipartisan cloture vote (66-32) limits the amount of further debate before a final vote is taken to approve or reject the bill. There is still an opportunity to propose amendments before the final vote, after which the bill will advance to the House of Representatives. The Block; MSN; Democrat Amendments.
Crypto Market Structure Bill Formally Introduced in House of Representatives
On May 29, a bipartisan group of House members formally introduced the crypto market-structure bill that would clarify the jurisdictional boundaries of the SEC and CFTC over digital assets. A discussion draft of the legislation had been released earlier in the month. The House Financial Services and Agriculture committees will consider and revise the bill before voting on whether to send the bill to the full chamber. The House Financial Services Committee held a hearing on the bill on June 4. Axios; Law360; Bill.
New Hampshire Becomes the First U.S. State to Pass “Strategic Bitcoin Reserve” Bill
On May 6, New Hampshire Governor Kelly Ayotte signed bill HB 302 into law, enabling up to 10% of the State’s general fund to be allocated to both precious metals and digital assets with a market cap exceeding $500 billion – a threshold currently met only by Bitcoin. The State can invest in qualifying digital assets either directly or via an exchange-traded fund, and may self-custody these assets or use a custodian. On May 7, Arizona followed suit and passed its own crypto reserve bill, but Governor Katie Hobbs vetoed it five days later. A similar bill has been adopted by the Texas State Legislature and is awaiting the signature of Governor Greg Abbott. Other States are currently considering adopting similar legislation, while these efforts have been paused in Florida. The Block; Axios.
The OCC Confirms that U.S. Banks Can Buy and Sell Customers’ Crypto on Their Behalf
On May 7, the Office of the Comptroller of the Currency published Interpretive Letter No. 1184, which clarified that national banks and federal savings associations may buy and sell crypto-assets held in custody on a customer’s behalf at the direction of the customer. The agency also stated that national banks can outsource crypto custody and trade execution services to third parties if proper risk-management procedures are in place. The guidance is consistent with prior OCC, Federal Reserve, and FDIC guidance and other actions as they continue to signal increased receptivity to crypto-related activities and digital assets in the banking industry on behalf of clients. Interpretive Letter No. 1184; The Block.
SEC and FINRA Withdraw Broker-Dealer Guidance
On May 15, FINRA and the SEC Division of Trading and Markets withdrew their 2019 Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. The Joint Statement had set forth the SEC’s interpretation of the so-called Customer Protection Rule, which effectively prohibited broker-dealers from taking custody of digital assets. The withdrawal was accompanied by new FAQs on broker-dealer responsibility. The FAQs state that broker-dealers can custody digital assets without complying with the Customer Protection Rule or with the requirements of the 2020 Special Purpose Broker-Dealer Statement. Withdrawal; Joint Statement; FAQs; Lexology.
Department of Labor Rescinds Guidance Discouraging 401(k) Crypto Investment
On May 28, the Department of Labor rescinded its 2022 guidance directing 401(k) plan fiduciaries to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.” In its place, the Department’s new guidance states that “a plan fiduciary’s decision should consider all relevant facts and circumstances.” DOL; Prior Guidance; The Block.

INTERNATIONAL

Hong Kong Passes Stablecoin Bill
Hong Kong’s Legislative Council passed a stablecoin bill for fiat-referenced stablecoins. The bill will require stablecoin issuers to obtain a license from the Hong Kong Monetary Authority and comply with a range of requirements, including proper management of asset reserves, redemption mechanisms, and segregation of client assets. The bill is expected to come into effect this year, with “sufficient time” allowed for the industry to understand the requirements. The bill builds on Hong Kong’s recent expansion of its crypto market, including the introduction of a virtual crypto asset regime for crypto trading platforms in 2023, and the launch of a sandbox for stablecoin issuers in 2024. The Block; CNBC.
El Salvador Continues to Purchase Bitcoin After IMF Announces Agreement to Stop
On May 27, the International Monetary Fund announced that it had reached an agreement with the government of El Salvador to release $120 million of funds as part of a $1.4 billion loan program approved last year. As part of the agreement, the IMF noted that El Salvador agreed not to purchase more Bitcoin. After the announcement, however, El Salvador posted on X that it had purchased additional Bitcoin. The Block; IMF; X.
New Singapore Rules for Offshore Crypto Service Providers
The Monetary Authority of Singapore (MAS) has confirmed its new rules for crypto service providers that operate “outside Singapore” but with Singapore touchpoints (e.g. supported by a corporation or individuals in Singapore). To determine if a service provider operates “outside Singapore,” factors such as whether the front-office functions (e.g. sales, business development) or customers are located outside Singapore are relevant. In-scope service providers will not benefit from any transitional grandfathering. They must suspend or cease their business by June 30, 2025. The MAS will grant licenses under the new framework only in extremely limited circumstances (as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related). The MAS has published ongoing requirements (conduct, prudential, governance, risk management etc.) for those service providers that will obtain a license. Consultation Paper.
FCA Consults on Stablecoin Issuance and Custody Rules
On May 28, the UK Financial Conduct Authority (FCA) published consultation papers CP25/14 and CP25/15, seeking stakeholder feedback on a draft framework that would bring the activities of issuing “qualifying stablecoins” and safeguarding “qualifying cryptoassets” within the regulatory perimeter, and introduce prudential rules for the aforementioned activities. Proposed regulatory measures relating to stablecoin issuance include requirements for full reserve backing, guaranteed par redemption on a T+1 basis, and a prohibition on distributing stablecoin yield to customers. The FCA is further proposing to introduce a new prudential regime to ensure that crypto firms set aside adequate financial resources. The proposed framework—which will mirror the three-pillared approach of minimum capital, liquidity buffers and risk controls used in traditional finance—will set baseline rules applicable across sub-sectors in the crypto industry and prescribe capital and liquidity rules for stablecoin issuers. Interested respondents are invited to provide comments by July 31, 2025. CP25/14; CP25/15.

SPEAKER’S CORNER

UNITED STATES

Commissioner Peirce Describes Role for the SEC in Crypto Regulation
On May 29, SEC Commissioner Hester Peirce spoke at the Bitcoin 2025 conference in Las Vegas. Acknowledging that the SEC had dismissed several crypto-related enforcement actions, Commissioner Pierce emphasized that the Commission still has a role in enforcing the law against bad actors in the crypto space. “The goal is to use our enforcement tool for what it was intended to be used for, which is when there are clear rules and people violate them, then we can use our enforcement too.” The Commissioner also stated that “most crypto assets as we see them today are probably not themselves securities,” but that “doesn’t mean that you can’t sell a token that is not itself a security in a transaction that is a securities transaction.” Speech; The Block; Cointelegraph.
SEC Holds Tokenization Roundtable
On May 12, the SEC held a roundtable on tokenization as part of a series of discussions on digital asset regulation. The roundtable, held at the SEC’s headquarters, included panels on the evolution of tokenized capital markets and on the future of tokenization. In his keynote address, SEC Chairman Paul Atkins outlined the Commission’s goals to create clear guidelines for issuance of digital assets, to allow more choice regarding how to custody digital assets, and to allow a wider variety of trades, including “‘pairs trading’ between securities and non-securities.” SEC; Keynote.

INTERNATIONAL

Nigel Farage Advocates for UK Bitcoin Reserve
On May 29, UK Reform Party leader and former Brexit campaigner Nigel Farage pledged to introduce legislation to establish a strategic bitcoin reserve if he were to be elected Prime Minister. Speaking at the Bitcoin 2025 conference in Las Vegas, he also pledged to ban crypto debanking and to lower the capital gains tax. Speech; The Block.

OTHER NOTABLE NEWS

Coinbase Acquires Crypto Options Exchange Deribit for $2.9 Billion
On May 8, Coinbase agreed to acquire the crypto options exchange Deribit for approximately $2.9 billion in cash and stock. The transaction is still subject to regulatory approvals and closing conditions and is expected to close by year-end. Coinbase Blog; CoinDesk.
Leaders of IRS Crypto Unit Departs, Trish Turner Takes Over
On May 6, Trish Turner, a longtime IRS official, was appointed to lead the agency’s digital-asset unit after the exit of Sulolit Mukherjee and Seth Wilks, who co-led the unit for over a year. Before this new role, Turner served as a senior advisor within this unit responsible for crypto taxation and enforcement. The Block.
Three CFTC Commissioners Announce Departure
On May 21, CFTC Commissioner Kristin Johnson announced her intent to leave the agency, joining two others—Summer Mersinger, and Christy Goldsmith Romero—who had already announced that they would step down at the end of May. With former Chairman Rostin Behnam having departed earlier this year, when Commissioner Johnson leaves only acting Chair Caroline Pham will remain. Pham has also stated that she plans to leave the agency once President Trump’s nominee, Brian Quintenz, is confirmed. The CFTC has not operated with so few governing members since early 2022. Law360.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Kendall Day, William Hallatt, Michelle Kirschner, Hagan Rooke, Jeff Steiner, Sara Weed, Sam Raymond, Nick Harper, Nicholas Tok, Apratim Vidyarthi, Justin Fishman, and Theo Curie.

FinTech and Digital Assets Group Leaders / Members:

Ashlie Beringer, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (+1 202.955.8256, mbopp@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ella Alves Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Sébastien Evrard, Hong Kong (+852 2214 3798, sevrard@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)

Nick Harper, Washington, D.C. (+1 202.887.3534, nharper@gibsondunn.com)

Martin A. Hewett, Washington, D.C. (+1 202.955.8207, mhewett@gibsondunn.com)

Sameera Kimatrai, Dubai (+971 4 318 4616, skimatrai@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Stewart McDowell, San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Hagen H. Rooke, Singapore (+65 6507 3620, hhrooke@gibsondunn.com)

Mark K. Schonfeld, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Orin Snyder, New York (+1 212.351.2400, osnyder@gibsondunn.com)

Ro Spaziani, New York (+1 212.351.6255, rspaziani@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Eric D. Vandevelde, Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Benjamin Wagner, Palo Alto (+1 650.849.5395, bwagner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

Partners Collin Cox, Sydney Scott, Gregg Costa, Andrea Smith, and Trey Cox recently spoke to Texas Lawyer about the strategic growth of our Houston trial team. As Collin told the publication, “The plan was, and is, to build the best litigation department in Houston with the resources of a big firm like Gibson Dunn.”

Gibson Dunn Building Trial Team in Houston With Lawyers Drawn to the Courtroom
After launching its Houston office in 2017 with transactional partners, Gibson, Dunn & Crutcher has strategically built a trial team over the last four years.
Law.com | Texas Lawyer
By Brenda Sapino Jeffreys
June 05, 2025

Since the hiring of litigation partner Collin Cox in 2021, Gibson, Dunn & Crutcher has strategically built a trial practice within its eight-year-old Houston office, which was launched with a splashy team of Big Law transactional partners.

Cox, who came from trial boutique Yetter Coleman as the first trial partner in the office, made the move with the goal of building a litigation practice on the firm’s Big Law platform. In 2022, the firm hired litigation partners Sydney Scott, formerly a partner with Houston’s Smyser Kaplan & Veselka, and Gregg Costa, who stepped down from the U.S. Court of Appeals for the Fifth Circuit and joined the Houston team.

“The plan was, and is, to build the best litigation department in Houston with the resources of a big firm like Gibson Dunn,” Collin Cox said.

The trial team has grown to four partners—New York partner Andrea Smith recently transferred to the Houston office—and 13 associates, with more on the way in the fall.

Trey Cox, a Dallas partner who is co-chair of the firm’s global litigation practice group, said the plan is to continue to strategically grow the Houston trial team by acquiring “excellent talent at both the top end and at the junior level.”

“Look, it’s going great. Litigation is continuing to grow. We’ve got all of these companies moving in here. The economy has made the corporate side of things a little more uneven, the uncertainty, but frankly that uncertainty is good for litigation,” Trey Cox said.

Trey Cox, who joined Gibson Dunn’s office in 2020 from Lynn Pinker Cox & Hurst, said Houston was an outlier among Gibson Dunn offices when it lacked a litigation team. After he joined the firm in Dallas, he started working on recruiting Collin Cox to be the base of the Houston litigation team.

Bolstered by the associates, the team of Cox, Scott and Costa tried seven lawsuits to trial or arbitration in 2024.

And in 2025, a team led by Collin Cox, Costa and Trey Cox won a verdict in state court in North Dakota against environmental organization Greenpeace and affiliates. The jury awarded their clients nearly $667 million, after finding Greenpeace defamed the companies and incited protesters to trespass on their property and disrupt construction efforts.

“We had three first-chair lawyers. That’s crazy. I’m not sure who else can put three first-chair lawyers on the floor,” Trey Cox said.

“It’s a great place in terms of people and quality of work,” Collin Cox said.

Scott said when she decided to leave Smyser Kaplan, she figured Gibson Dunn would be a good fit, because the firm has a reputation for getting hired for “landmark cases” and winning them. And, she said, “I love trying cases.”

“I didn’t think that when I started at Gibson Dunn [that] I would have a year like last year. I tried four cases in a year, which is pretty remarkable,” she said.

Her trials included two defending Johnson & Johnson in talcum powder cases — one in Miami that ended in a hung jury, and one with Collin Cox in Dallas that settled during trial.

The number of significant trials shows that Collin Cox’s vision for growing the practice has panned out, she said, because they have been busy and getting hired for big lawsuits, some out of state, like the North Dakota litigation for Energy Transfer and the Dakota Access Pipeline.

“Texas has some of the best trial lawyers in the country, but the opportunity for me to take associates to Miami Dade County to try a case has sharpened us all as lawyers [with the] opportunity to argue to other jury pools,” Scott said.

Costa said that when he decided to leave the bench, he wanted to practice at a firm where litigation “really matters,” and it is roughly 50% of the work at Am Law 100 firm Gibson Dunn. The Houston office was also in a “sweet spot,” because it was “effectively launched” in 2017 and has grown.

In his view, the litigation team in Houston is doing what many Big Law firms don’t do, which is actually going to trial and also focusing on giving younger lawyers an active role in the trial.

“I gave up the federal bench and I didn’t want to go somewhere and shuffle paper,” he said.

Collin Cox, co-partner in charge of the Houston office, said the team sees potential for work stemming from the new Texas Business Court, a specialty court launched in 2024 to handle certain commercial disputes.

Costa, global co-chair of the Gibson Dunn trials practice group, said it’s not just the number of lawsuits the Houston team has tried, but the variety of litigation, including commercial, oil and gas litigation, and defending Johnson & Johnson in talc cases.

Reprinted with permission from the June 5, 2025 edition of “Texas Lawyer” © 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

Partner Jason Schwartz told The Wall Street Journal that a recent U.S. Supreme Court decision allowing a woman to pursue a claim that she was denied a promotion because she is straight “will supercharge the current wave of reverse discrimination lawsuits by removing a significant obstacle for plaintiffs.”

In a unanimous decision, the Supreme Court found that the lower appeals court was wrong to require the plaintiff to show “background circumstances” indicating anti-straight bias by her employer — a burden that would not have applied had the plaintiff been gay.

CC/Devas (Mauritius) Limited v. Antrix Corp. Ltd., Nos. 23-1201, 24-17 – Decided June 5, 2025

Today, a unanimous Supreme Court held that personal jurisdiction exists under the FSIA whenever an exception to immunity applies and service of process has been accomplished, without regard to whether a foreign state has minimum contacts with the United States.

“Personal jurisdiction exists under § 1330(b) of the FSIA when an immunity exception applies and service is proper.”

Justice Alito, writing for the Court

Background:

The Foreign Sovereign Immunities Act of 1976 provides that foreign states are generally immune from suit in United States courts, subject to several exceptions. 28 U.S.C. §§ 1330, 1602 et seq. For example, the FSIA waives immunity for certain suits to confirm arbitration awards. Id. § 1605(a)(6). When an exception applies, the FSIA vests federal courts with “original jurisdiction” over the claims, id. § 1330(a), and provides that “[p]ersonal jurisdiction over a foreign state shall exist” where the district court possesses subject-matter jurisdiction and “where service has been made under section 1608 of this title,” id. § 1330(b).

In 2005, Antrix Corporation Ltd.—the commercial arm of India’s national space agency—entered into a satellite-leasing agreement with Devas Multimedia Private Ltd.—a privately owned Indian company. Several years later, Antrix invoked the agreement’s force-majeure clause to terminate the agreement with Devas, arguing that India’s new satellite-allocation policy prevented it from performing under the contract. Devas initiated arbitration before the International Chamber of Commerce, which awarded Devas damages for Antrix’s breach of contract.

Devas sought to confirm the award in the United States, invoking the FSIA’s arbitration exception as the basis for federal jurisdiction. On appeal of the confirmed award, the Ninth Circuit held that the court lacked personal jurisdiction over Antrix. Although it did not question that the arbitration exception applied, the court of appeals imposed an additional requirement that a foreign state have sufficient “minimum contacts” with the United States. The Supreme Court granted certiorari to decide whether the FSIA requires proof of minimum contacts before a United States court can exercise personal jurisdiction over a foreign state.

Issue:

Whether plaintiffs must prove minimum contacts before federal courts may assert personal jurisdiction over foreign states sued under the FSIA.

Court’s Holding:

The FSIA does not require proof of minimum contacts before a court can exercise personal jurisdiction over a foreign state.

What It Means:

The Court interpreted 28 U.S.C. § 1330(b) to provide for personal jurisdiction whenever an FSIA exception to immunity applies and a party properly served the foreign state under 28 U.S.C. § 1608. In doing so, the Court admonished the Ninth Circuit for its “strange” statutory interpretation that failed to “enforc[e] these provisions as written.” Op. 10–11.
Although this case arose under the arbitration exception to immunity, the Court’s analysis of 28 U.S.C. § 1330(b) applies to any suit implicating one of the several exceptions in 28 U.S.C. §§ 1605–1607.
In reaching its decision that the statutory text of the FSIA does not impose a minimum contacts requirement, the Court left open for consideration on remand the question whether the Due Process Clause of the Fifth Amendment “itself requires a showing of minimum contacts.” Op. 12–13. Thus, it is possible future courts may hold jurisdiction lacking as a constitutional matter, regardless of the text of the FSIA.

Gibson Dunn represented Devas’s owners as Petitioners.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the U.S. Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com
Jacob T. Spencer 202.887.3792 jspencer@gibsondunn.com	David W. Casazza +1 202.887.3724 dcasazza@gibsondunn.com

Related Practice: Judgment and Arbitral Award Enforcement

Matthew D. McGill
+1 202.887.3680
mmcgill@gibsondunn.com

This alert was prepared by associates Elizabeth A. Kiernan and Rebecca Roman.

Ames v. Ohio Department of Youth Services, No. 23-1039 – Decided June 5, 2025

Today, the Supreme Court unanimously held that Title VII of the Civil Rights Act of 1964 does not impose an additional requirement on majority-group plaintiffs to show “background circumstances” suggesting that their employer discriminates against the majority group.

“We hold that this additional ‘background circumstances’ requirement is not consistent with Title VII’s text or our case law construing the statute.”

Justice Jackson, writing for the Court

Background:

Title VII makes it unlawful for any “employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . . , because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(1). Those protections cover adverse employment actions based on sexual orientation. Bostock v. Clayton County, 590 U.S. 644, 649-52 (2020).

Marlean Ames, a straight woman, sued her employer under Title VII, claiming she was denied a promotion and later demoted based on her sexual orientation. In support, she pointed out that her employer hired a gay woman for the position to which she had applied and a gay man to fill her previous position after the demotion. The district court granted summary judgment for her employer, and the Sixth Circuit affirmed. Applying circuit precedent, the court of appeals held that Ames had failed to show “background circumstances to support the suspicion that the defendant is th[e] unusual employer who discriminates against the majority.” The Supreme Court granted review to decide whether Title VII imposes that background-circumstances requirement.

Issue:

Whether a plaintiff who belongs to a majority group must show “background circumstances” suggesting the defendant is the “unusual employer who discriminates against the majority” to establish a prima facie case of discrimination under Title VII of the Civil Rights Act of 1964.

Court’s Holding:

No: Title VII imposes the same evidentiary requirements on majority-as on minority-group plaintiffs.

What It Means:

Today’s decision confirms that courts assessing Title VII claims need not divide plaintiffs into majority and minority groups. The burdens of proof are identical for all Title VII plaintiffs, regardless of whether the plaintiffs are in the majority or minority with respect to their protected characteristics.
The Court’s opinion lowers the barrier for majority-group plaintiffs to bring (and increases the burden on employers to defend against) so-called reverse-discrimination claims, particularly in the Sixth, Seventh, Eighth, Tenth, and D.C. Circuits, all of which had adopted the background-circumstances requirement.
The Court’s opinion emphasizes that Title VII prohibits covered discrimination of any kind, not merely discrimination against a limited set of historically disadvantaged groups, which comports with the Court’s modern approach to most anti-discrimination statutes.
Given the narrowness of the question presented, the opinion leaves a number of related Title VII issues unaddressed. For example, the Court assumed without deciding that McDonnell Douglas—the traditional framework for evaluating Title VII claims based on circumstantial evidence—applies in the summary-judgment context. The Court also declined to address whether McDonnell Douglas requires specific evidence of pretext or only a showing that discrimination was a motivating factor in the employer’s decision. And Justices Thomas and Gorsuch, in a separate concurrence, questioned whether McDonnell Douglas “is a workable and useful evidentiary tool” at all.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Labor and Employment

Jason C. Schwartz +1 202.955.8242 jschwartz@gibsondunn.com	Katherine V.A. Smith +1 213.229.7107 ksmith@gibsondunn.com	Zakiyyah T. Salim-Williams +1 202.955.8503 zswilliams@gibsondunn.com
Danielle J. Moss +1 212.351.6338 dmoss@gibsondunn.com	Harris M. Mufson +1 212.351.3805 hmufson@gibsondunn.com	Cynthia Chen McTernan +1 213.229.7633 cmcternan@gibsondunn.com

This alert was prepared by associates Matt Aidan Getz and Bryston C. Gallegos.

Join us for a 30-minute briefing covering several Executive Compensation practice topics. This program is part of a quarterly webcast series designed to provide quick insights into emerging issues as well as practical advice.

Topics to be discussed:

Emerging best practices and analysis of disclosures around equity grant timing policies and practices
Expanding clawback policies beyond accounting restatements
Executive security, both physical and digital

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 0.5 credit hour, of which 0.5 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 0.5 hour.

Gibson, Dunn & Crutcher LLP is authorized by the Solicitors Regulation Authority to provide in-house CPD training. This program is approved for CPD credit in the amount of 0.5 hour. Regulated by the Solicitors Regulation Authority (Number 324652).

Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. It is the opinion of this provider that this activity qualifies for up to 0.5 hour toward your annual CLE requirement in Connecticut, including 0 hour(s) of ethics/professionalism.

Application for approval is pending with the Illinois, Texas, Virginia, and Washington State Bars.

PANELISTS:

Krista Hanvey is Co-Chair of Gibson Dunn’s Executive Compensation and Employee Benefits practice group and Co-Partner in charge of the firm’s Dallas office. She counsels clients of all sizes across all industries using a multi-disciplinary approach to compensation and benefits matters that crosses tax, securities, labor, accounting and traditional employee benefits legal requirements. Ms. Hanvey has significant experience with all aspects of executive compensation, health and welfare benefit plan, and retirement plan compliance, planning, and transactional support. She also oversees the Dallas office’s pro bono adoption program.

Alli Balick is Of Counsel in the Los Angeles office of Gibson Dunn. She is a member of the firm’s Executive Compensation and Employee Benefits Practice Group. Her practice focuses on all aspects of executive compensation and employee benefits, including tax, ERISA, accounting, corporate, and securities law aspects of equity and other incentive compensation plans, qualified and nonqualified retirement and deferred compensation plans and executive employment and severance arrangements. Alli also practices with the firm’s Corporate and Securities Regulation and Corporate Governance departments, focusing on mergers and acquisitions, emerging growth companies, corporate governance and securities law matters.

In a recent episode of the Original Jurisdiction podcast, partner Debra Wong Yang joined host David Lat to reflect on the formative family and professional experiences that shaped her journey — from serving as a California state judge and U.S. Attorney to advising on multiple White House task forces. Today, she chairs our Crisis Management Practice Group, bringing a career of public service and legal excellence to the most complex challenges our clients face.

Speaking with David about her experience at Gibson Dunn, Debra shared how she has been inspired to recognize the potential to affect meaningful change, tackle the bigger issues confronting the country, and help make it a better place. “And when I saw that it went way beyond just lawyering and doing cases, it was really opportunities, opportunities to affect major change in the world. And I think that’s the thing that I treasured the most about the run that I’ve had here.”

Listen to the episode: https://davidlat.substack.com/p/crisis-management-debra-wong-hang-gibson-dunn-crutcher-podcast-interview

The Judgment is only the third occasion on which the Competition Appeal Tribunal has been required to approve a collective settlement, and it offers valuable insight to the CAT’s developing approach to a settlement procedure still in its infancy.

A. Introduction

In the long-running Merricks v Mastercard litigation, the Competition Appeal Tribunal (the CAT) approved the Class Representative and the Defendants’ (together, the “Settling Parties”) joint application for a collective settlement approval order (CSAO) (the Settlement Application). On 20 May 2025, the CAT issued its judgment setting out its reasons for that approval, together with its decision as to how the settlement sum should be distributed (the Judgment).

The Judgment is important because it is only the third occasion on which the CAT has been required to approve a collective settlement. As such, the Judgment offers valuable insight to the CAT’s developing approach to a settlement procedure still in its infancy. It is also the first time the CAT has had to consider whether it is required to consider the interests of other stakeholders (in particular, the litigation funder, who opposed the Settlement Application) when considering a settlement application.

This client alert briefly examines the Judgment and identifies some key takeaways.

B. Collective Settlement Procedure

The CAT is required to approve proposed settlements in opt-out collective proceedings.[1] Accordingly, once parties have reached a settlement, they must apply jointly to the CAT for a CSAO (which application will usually be determined at a hearing). The application must among other things: set out the terms of the proposed settlement; contain a statement that the applicants believe the terms of the proposed settlement are just and reasonable, supported by evidence; and specify how any sums are to be paid and distributed. The test for approval is whether the terms of the proposed settlement are “just and reasonable”.

The process is new, with little authority on how it should operate in practice. Prior to the Judgment, there had only been two previous decisions under the collective settlement regime, each involving far smaller sums. In McLaren,[2] the Class Representative settled with one of 12 Defendants for £1.5 million (comprising both damages and costs). In Gutmann,[3] the Class Representative settled with one of two Defendants for up to £25 million (comprising both damages and costs).

C. Judgment Summary

Approval of the settlement

The Settling Parties signed a settlement agreement on 3 December 2024 (the Settlement Agreement), which provided that, subject to the CAT’s approval, the Defendants would pay £200 million in full and final settlement of the proceedings (inclusive of interest and all costs and expenses) (the Settlement Sum).[4] The Settlement Agreement did not contain any provisions regarding distribution of the Settlement Sum, which was expressed to be a matter for the CAT.[5] The litigation funder was not a party to the Settlement Agreement, strongly opposed the Settlement Application on the basis that the Settlement Sum was “significantly too low”,[6] and was granted permission to intervene. As a result of the litigation funder’s opposition, the Settlement Agreement provided for an indemnity from the Defendants to the Class Representative of up to £10 million against any contractual exposure he might have to the litigation funder as a result of accepting the settlement (the Indemnity).[7]

Notwithstanding the litigation funder’s intervention and objections, the Judgment makes clear that the test to be applied by the CAT in determining whether to approve a collective settlement application is whether the terms of the settlement are “just and reasonable” from the exclusive perspective of the class members (as opposed to all stakeholders involved, i.e. including the litigation funder).[8] That is because, in opt-out proceedings, class members are not involved in the proceedings and the CAT’s role is to scrutinize the proposed settlement on their behalf.

Rule 94(9) of the Competition Appeal Tribunal Rules 2015 (the CAT Rules) provides that, in determining whether a collective settlement is “just and reasonable”, the CAT shall take into account all relevant circumstances, including a non-exhaustive list of factors. In this regard, the Judgment emphasises that the CAT will not require a settlement to be “perfect” and that “there is likely to be a range of settlements which could be approved”.[9]

The CAT considered various factors listed in CAT Rule 94(9). In doing so, it noted, amongst other things, that:

the number of class members entitled to participate in the settlement was “vast”;[10]
the £200 million Settlement Sum was “well within the reasonable range”, despite the litigation funder’s objections;[11]
there was “real benefit to class members in securing a payment of damages now, rather than waiting potentially a further two years for the uncertain prospect of potentially a higher amount”;[12]
the fact that any further costs would have been paid by the litigation funder was not an irrelevant consideration from the perspective of the class members since the litigation funder would have sought reimbursement for such costs;[13], and
there was “no requirement for there to be an independent opinion” in the circumstances – it would have been very difficult to obtain a meaningful opinion in the short period of time available and, in any event, the CAT was not short on legal analysis of the relevant strengths and weaknesses of the case, nor past judgments in the case (however, note the CAT’s postscript guidance below).[14]

More generally, the CAT observed that it is not concerned with deciding “the best negotiating strategy”.[15] In this regard, it made clear that there may be a difference in perspective and interests between a class representative and a litigation funder. For the former, a 15% chance that the case may fail might be an unacceptable risk in terms of rejecting a settlement sum of £200 million; whereas for the latter, which has a portfolio of cases and seeks to make a high return on that portfolio, continuing a case which only has a 30% chance of achieving £500 million as opposed to settling it for £200 million may be a more commercially sensible approach.[16]

In relation to the Indemnity, the CAT noted this may have given rise to a conflict of interest when the Settlement Agreement was entered into. However, it explained that it had subjected the terms of the settlement to “careful scrutiny to satisfy [itself] that they are just and reasonable”.[17] Further, the Class Representative had reached the view that the Settlement Sum was in the best interests of the class members before the Defendants offered the Indemnity.[18]

Distribution

As a preliminary point, the CAT rejected the litigation funder’s “fundamentally misconceived” argument that it could not: (i) approve the Settlement Application; but, (ii) then direct a different basis of distribution to that proposed in the draft order accompanying the Settlement Application. Rather, the CAT held that it must first determine the Settlement Application and then must itself decide the appropriate order as to how the Settlement Sum is distributed.[19] This distinction is made clear in CAT Rule 94(4)(b) and (d).[20]

The CAT highlighted as “fundamental” that “the collective proceedings regime should operate for the benefit of [class members] and not primarily for the benefit of lawyers and funders” while recognising the need for “commercial litigation funding to pay for it”.[21] The Tribunal further noted that there is “no one right answer […] regarding the amount to be offered to each [class member]”; “the only requirement is that the distribution should be fair and reasonable”.[22]

On that basis, the CAT divided the Settlement Sum into the following pots for distribution:

Pot 1 – Class Members. The CAT agreed with the Settling Parties that a payment of £45 per class member, which was expected to lead to a take-up of 5% (i.e., 2.2 million class members), was reasonable and fair, subject to a cap of £70 per class member in the event of lower take-up to ensure payments were not excessive.[23] Equally, given the possibility of higher take-up, which could exhaust the Settlement Sum, the CAT determined that it was necessary to reserve a portion of the Settlement Sum for the litigation funder.[24] Accordingly, the CAT limited Pot 1 to £100 million.
Pot 2 – Costs. The CAT decided that this pot should cover: (i) costs paid on behalf of the Class Representative; (ii) the litigation funder’s payment of its own direct costs; and (iii) further anticipated costs, with certain of those costs to be assessed for reasonableness by an independent expert. The CAT noted that the total Pot 2 sum may exceed the estimated figure of £45.6 million in the Settlement Application.
Pot 3 – Litigation Funder’s Profit Return and Other. Pot 3 would amount to £100 million less the sum of Pot 2. The CAT determined it should be used to:
1. Pay the Class Representative’s costs which do not fall within Pot 2.[25]
2. Pay the litigation funder’s profit return. The Settlement Application expressly left the determination of the profit return to the CAT, in line with the statutory scheme and the LFA.[26] As an initial matter, the CAT was satisfied that the litigation funder should be paid a profit return given the importance of litigation funding to collective proceedings. However, to determine the appropriate level in the circumstances,[27] it was guided by jurisprudence from Australia and Canada. The CAT took into account the significant value of the funding commitment (a notional £54.85 million),[28] the significant funding period (over 5 years),[29] the fact that the case was “very far from a success”,[30] the litigation funder’s strategy of running a portfolio of cases,[31] and an Australian judgment which found that the return on investment for a substantial litigation funder is 1.2x for all completed cases, 1.9x for cases which did not provide a negative return, and above 4x for 15% of cases.[32] On that basis, although the litigation funder argued it was entitled to an “agreed minimum floor” of a return of £179 million, the CAT determined that a return on investment of 1.5x (amounting to only £68 million) would be appropriate, “recognising the significant risk but reflecting also the poor outcome”.[33]
3. Supplement Pot 1 in the event that more than 5% of class members submit claims.

Any remaining money in Pot 3 after these three stages would go to a charity, The Access to Justice Foundation (as proposed by the Class Representative), which the CAT determined to be more appropriate than The Good Things Foundation (proposed by the Defendants).[34]

D. Takeaways for Future Collective Settlements

The CAT emphasised that its approach to settlement in this case had been “determined by the exceptional circumstances of this case” and “should not be regarded as a guide for more positive settlements”.[35] Nonetheless, given the limited jurisprudence in this area, we anticipate the Judgment, together with the Canadian and Australian jurisprudence, will at the very least provide a starting point for future collective settlements.

Practitioners should also note the CAT’s postscript guidance that: (i) settlement applications should have a section specifically addressing full and frank disclosure;[36] (ii) they will ordinarily expect a comprehensive opinion from a KC;[37] and (iii) if a settlement application is made shortly before trial, the likely outcome is that the trial will be adjourned and refixed if the settlement is not approved.[38]

Finally, in the days since the Judgment, the litigation funding industry has sounded the alarm in relation to the CAT’s approach to the litigation funder’s level of return on investment which they say is far too low and likely to produce a chilling effect in terms of the availability of funding for future collective proceedings. Indeed, the litigation funder in this case has called the Judgment “unfair” and is exploring potential options to appeal. Claimant law firms and other litigation funders will therefore be watching closely to see what steps the litigation funder takes next.

[1] Section 49A Competition Act 1998.

[2] Case 1339/7/7/20 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others.

[3] Case 1304/7/7/19 Justin Gutmann v First MTR South Western Trains Limited and Another.

[4] Judgment, para. 61.

[5] Judgment, para. 68.

[6] Judgment, para. 75.

[7] Judgment, para. 67.

[8] Judgment, para. 81.

[9] Judgment, para. 83.

[10] Judgment, para. 84.

[11] Judgment, para. 89.

[12] Judgment, para. 100.

[13] Judgment, para. 100.

[14] Judgment, para. 106.

[15] Judgment, para. 107.

[16] Judgment, para. 107.

[17] Judgment, para. 102.

[18] Judgment, para. 103(1).

[19] Judgment, para. 112.

[20] Judgment, para. 118.

[21] Judgment, para. 121.

[22] Judgment, para. 129.

[23] Judgment, paras 129 and 131.

[24] Judgment, para. 130.

[25] Judgment, para. 196.

[26] Judgment, para. 167.

[27] Judgment, para. 168.

[28] Judgment, para. 179.

[29] Judgment, para. 180.

[30] Judgment, para. 182.

[31] Judgment, para. 183.

[32] Judgment, para. 187.

[33] Judgment, para. 188.

[34] Judgment, para. 202.

[35] Judgment, para. 208.

[36] Judgment, para. 211.

[37] Judgment, para. 212.

[38] Judgment, para. 213.

The following Gibson Dunn lawyers prepared this update: Doug Watson, Dan Warner, and Jack Crichton.

Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions, Antitrust & Competition, or Litigation practice groups, or the following in London:

Philip Rocher (+44 20 7071 4202, procher@gibsondunn.com)

Patrick Doris (+44 20 7071 4276, pdoris@gibsondunn.com)

Doug Watson (+44 20 7071 4217, dwatson@gibsondunn.com)

Susy Bullock (+44 20 7071 4283, sbullock@gibsondunn.com)

Dan Warner (+44 20 7071 4213, dwarner@gibsondunn.com)

Jack Crichton (+44 20 7071 4008, jcrichton@gibsondunn.com)

Partner Ibrahim Soumrany spoke to Arabian Gulf Business Insight about promising signs for Saudi Arabia’s IPO markets, as companies begin to list again following a period of geopolitical uncertainty.

Ibrahim told the publication that while some companies have chosen to delay their IPO plans by a few weeks, there is still momentum from those intending to list. “Everyone’s acknowledging that it’s not a very easy market, but I don’t think that anyone is taking the view that people are about to pull their IPOs. It also depends on how much you price your IPO; it’s a kind of balancing act.”

Washington, D.C. partner Matt Axelrod spoke to Global Investigations Review (subscription required) about a recent U.S. Department of Justice (DOJ) decision to decline prosecution of a company that voluntarily disclosed export controls violations.

He also discussed how the DOJ may view similar cases in future. “When a case fits this fact pattern [of] a less-serious national security harm and rogue employee … the message seems to be that if you do the voluntary self-disclosure, robust internal investigation [and] remediation, a declination is certainly possible,” Matt told the publication.

Partner Hagen Rooke has been featured in leading cryptocurrency news outlets, including Cointelegraph, discussing the impact of the Singapore central bank’s June 30 deadline for local crypto firms targeting overseas markets to halt operations or face fines of up to $200,000.

Hagen cautioned that while firms may apply for licenses from the Monetary Authority of Singapore (MAS) to target overseas markets, approvals will be rare. “The MAS will grant licences under the new framework only in extremely limited circumstances, as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related.”

He also urged companies to consider swift action to de-risk through operational restructuring to remove their Singapore touchpoints.

This update examines key changes made to the Ordinance during the Hong Kong Legislative Council’s consideration of the Bill, flags a number of key observations made by the Hong Kong Government during the LegCo process, and outlines key aspects of the Consultation Papers.

On May 21, 2025, the Hong Kong Legislative Council (LegCo) passed the long-awaited Stablecoins Bill (Bill) to introduce a robust regulatory framework for fiat-referenced stablecoin issuers in Hong Kong, focusing on stablecoins that maintain their value by referencing official currencies (specified stablecoins).[1] While the Stablecoins Bill was gazetted as the Stablecoins Ordinance (Cap. 656) (Ordinance) on May 30, 2025,[2] the Ordinance has not yet come into effect and its commencement date is currently unknown. However, the Hong Kong Monetary Authority (HKMA) has indicated that it expects the regime to come into effect this year.

As part of the HKMA’s preparation for the commencement of the Ordinance, the HKMA published two consultation papers (Consultation Papers) on May 26, 2025.[3][4] In one of the consultation papers, titled “Consultation Draft Guideline on Supervision of Licensed Stablecoin Issuers”, the HKMA is seeking feedback on the proposed guidelines that set out its expectations regarding the minimum ongoing criteria that licensed stablecoin issuers must meet (Supervision Guideline). In a separate consultation paper, titled “Consultation Paper on the Proposed AML/CFT Requirements for Regulated Stablecoin Activities”, the HKMA is seeking views on its proposed anti-money laundering and counter-financing of terrorism (AML/CFT) requirements for stablecoin issuers seeking HKMA licensing to conduct regulated stablecoin activities (AML/CFT Consultation). The consultation period for both Consultation Papers is until June 30, 2025.

I. LegCo’s consideration of the Bill

In December 2024, the Government introduced the Bill to LegCo with the aim of establishing a regulatory regime for the supervision of activities involving stablecoins and providing the HKMA with relevant supervisory powers.[5] This followed the HKMA and Financial Services and Treasury Bureau’s consultation which concluded in July 2024 (see our previous client alert here).[6] LegCo’s dedicated Stablecoins Committee (Bills Committee) then debated the Bill at a number of meetings and sought clarifications from the Hong Kong Government on a range of topics related to the Bill prior to the Bill’s passage on May 21, 2025. As part of this process, the Bills Committee released two reports on May 9, 2025[7] and May 21, 2025[8] reporting on their deliberations (LegCo Reports).

The LegCo Reports provide valuable insight into the Hong Kong Government’s approach to the regulation of stablecoins, the guidance which can be expected from the HKMA in coming months and the amendments made to the Bill between its introduction in December 2024 and its passage in May 2025.

The key takeaways from the LegCo Reports are as follows:

The HKMA will issue guidelines regarding whether a specified stablecoin is issued ‘in Hong Kong’: The Ordinance will, once enacted, require persons which carry on ‘regulated stablecoin activity’ in Hong Kong to be licensed. This concept of ‘regulated stablecoin activity’ will capture the issuance of a specified stablecoin in Hong Kong or a HKD-referenced stablecoin outside of Hong Kong in the course of business. The LegCo Reports note that the HKMA will issue guidelines on the factors it will consider in determining whether a specified stablecoin is issued ‘in Hong Kong’, but that the Hong Kong Government intends for the HKMA to take a holistic approach which considers all relevant factors, including but not limited to:
1. the location of the issuer’s day-to-day management and operations;
2. place of incorporation;
3. where minting and burning occur;
4. where management of reserve assets takes place; and
5. the location of bank accounts used for processing cash flows related to minting and redemption.
The HKMA will take a holistic approach in deciding whether an activity constitutes “active marketing”: Under the Ordinance, a person would be regarded as holding out as carrying on a regulated stablecoin activity or offering a specified stablecoin if the person actively markets, whether in Hong Kong or elsewhere, to the public (i.e. the public of Hong Kong, including a class of that public) that the person carries on, or purports to carry on, a regulated stablecoin activity or the offering of a specified stablecoin. The LegCo Reports again signal that the HKMA will issue guidelines on the factors it will consider in determining whether a person is actively marketing to the public, but note that the Hong Kong Government intends for the HKMA to take a holistic approach which considers all relevant factors, including but not limited to:
1. the language used in marketing materials;
2. whether the materials are targeted at a group of people that resides in Hong Kong;
3. whether a Hong Kong domain name is used for a marketing website; and
4. whether there is a detailed marketing plan to promote the activity.
SVF licensees will be permitted to offer specified stablecoins to the Hong Kong public: The Bill had initially proposed only allowing four categories of firm to offer specified stablecoins to the Hong Kong public, namely licensed stablecoin issuers, firms licensed by the Securities and Futures Commission (SFC) to conduct Type 1 regulated activity, SFC-licensed Virtual Asset Trading Platforms and HKMA-regulated authorised institutions. However, one of the most significant amendments made to the Bill during the LegCo review process was to expand the definition of ‘permitted offeror’ to also include firms regulated by the HKMA as stored value facility (SVF) licensees under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584) (PSSVFO). The LegCo Reports note that this amendment was made on the basis of LegCo feedback and the Government’s consideration of stablecoin use cases and market trends, and that SVF licensees will be required to obtain prior and express approval from the HKMA before they commence offering specified stablecoins.
Restrictions on offering specified stablecoins issued by an entity that is not licensed by the HKMA to professional investors only: Importantly, the LegCo Reports also make it clear that the legislative intent of the Ordinance is to limit the offering of specified stablecoins issued by an entity that is not licensed by the HKMA to professional investors only, and flag that this restriction will be implemented through the publication of a notice in the Gazette by the Financial Secretary pursuant to section 9(3) of the Ordinance. Further, the HKMA and the SFC will also issue a circular directing permitted offerors (as set out above) to clearly indicate where specified stablecoins may only be offered to professional investors.

II. The Supervision Guideline

In order to obtain and maintain a licence under the Ordinance, stablecoin issuers will be required to meet a range of minimum criteria (as set out in Schedule 2 of the Ordinance) in relation to key areas of their business operations and risk and compliance functions. The Supervision Guideline being consulted on by the HKMA provides guidance on the HKMA’s expectations with regard to these minimum criteria and is summarised in the below table. The HKMA has indicated that it welcomes feedback from the industry on the Supervision Guideline, but has not identified specific questions or areas where it considers industry feedback would be most helpful.

Area	Key Requirements / Expectations	Details
Reserve Asset Management	Full Reserve Backing and Over-Collateralisation	Licensees must ensure that reserve assets are maintained at a level at least equal to the par value of all outstanding specified stablecoins in circulation.An additional layer of over-collateralisation is required to mitigate potential market risks and provide enhanced protection for holders.Licensees are required to conduct regular reconciliation of reserve assets to ensure ongoing compliance with the minimum reserve and over-collateralisation requirements. The valuation of reserve assets must be performed using transparent and robust methodologies, ensuring that the adequacy of the backing is consistently verified.
	Quality and Composition of Reserve Assets	Licensees must hold reserve assets that are high quality, highly liquid, and carry minimal investment risk to ensure stablecoin reliability.Acceptable reserves include short-term bank deposits (up to three months), high-grade debt securities, overnight reverse repos, and investment funds holding only eligible assets. Reserves should generally match the stablecoin’s currency (unless otherwise approved by the HKMA), but for Hong Kong dollar-referenced stablecoins, U.S. dollar reserves are allowed due to the linked exchange rate system between the HKD and USD.
	Segregation and Safeguarding of Reserve Assets	Licensees must maintain reserve assets for each specified stablecoin in separate pools, distinct from other reserve assets and all other assets or funds held by the licensee. This segregation ensures that reserve assets are protected and not subject to claims from the licensee’s other creditors.Effective trust arrangements are required to ensure that reserve assets are held exclusively for the benefit of stablecoin holders and are always available to meet valid redemption requests at par value. Any income or loss from the management of reserve assets accrues to the licensee.
	Prohibition on Interest	Licensees are prohibited from paying interest or providing interest-like incentives to stablecoin holders.
	Transparency Requirements	To ensure transparency and maintain public confidence, licensees must publicly disclose their reserve asset management policy, the composition and value of their reserve assets, and the results of regular independent attestations and audits. Daily statements must be prepared and ready for submission to the HKMA if required, although licensees will generally only be required to report to the HKMA on a weekly basis.Licensees must report to the HKMA immediately on identification of a breach of statutory or regulatory requirements in relation to reserve assets management, material non-compliance with reserve assets management policy, and unresolved discrepancies identified in any reconciliation exercise.
Issuance, Redemption and Distribution	Prudent Issuance and Full Reserve Matching	Licensees are required to issue stablecoins in a prudent manner, ensuring that new coins are only minted upon receipt of matching funds in the referenced currency.The value of reserve assets must fully correspond to the value of outstanding stablecoins at all times.
	Redemption Rights	Stablecoin holders must have the right to redeem their stablecoins at par value, with a direct claim against the licensee for any shortfall, including in the event of insolvency.Redemption requests should be processed promptly, typically within one business day, and any associated fees must be reasonable and transparent. A licensee should establish and maintain an effective redemption mechanism for the stablecoins it issues.
	Distribution Requirements	A licensee should consider the licensing status of any third party entities involved in distributing its specified stablecoins. Where third party entities offer specified stablecoins in Hong Kong, the licensee should ensure that the third party entities are permitted offerors.Where engaging third party entities to provide liquidity on the secondary market for specified stablecoins issued by a licensee, the licensee should consider the need to engage such parties, and if so, the extent and scope of the arrangements, taking into account its business model and operational arrangement. The licensee should ensure that any such arrangements have the goal of maintaining relatively stable value for the specified stablecoins in the secondary markets, and that any potential and/or actual conflicts of interest have been identified as well as properly addressed and mitigated.
	Customer Due Diligence and Jurisdictional Controls	A licensee should establish adequate and effective policies and procedures for customer on-boarding in respect of issuance and redemption of specified stablecoins.A licensee should comply with the relevant laws and regulations in the jurisdictions where it offers specified stablecoins. Importantly, effective controls should be in place to detect and block attempts at location spoofing.
	Disclosure, Audit, and Reporting Requirements	Licensees must provide clear and comprehensive disclosures to the public regarding redemption processes, rights, and applicable fees.Regular audits of stablecoin operations are required to ensure compliance with its issuance, redemption and distribution policies, as well as the applicable regulatory requirements.
Other Business Activities	Prudent Conduct of Stablecoin Activities	Licensees are required to issue specified stablecoins in a prudent and sound manner, taking into account their business model and operational arrangements.
	Approval for Other Business Activities	Prior to engaging in any business activities outside of their licensed stablecoin operations, licensees must obtain prior consent from the HKMA. In seeking such approval, licensees should establish appropriate governance structures, conduct thorough risk assessments, and implement effective risk management measures.It is essential that these additional activities do not compromise the safety and soundness of the licensee’s stablecoin business or give rise to potential or actual conflicts of interest. Licensees must also ensure that sufficient resources remain dedicated to their stablecoin activities at all times. Licensees are responsible for determining whether their other business activities are subject to regulation and must ensure full compliance with all applicable regulatory regimes.
	Issuing Multiple Stablecoins	Licensees may issue more than one type of specified stablecoin, but must first consult with the HKMA before doing so. Licensees are expected to demonstrate that they possess adequate resources and operational capabilities to manage multiple stablecoin issuances without adversely affecting their existing operations.
Financial Resources	Minimum paid-up share capital	Licensees must have a minimum paid-up share capital of HK$25,000,000, or an equivalent amount in another currency that is freely convertible into Hong Kong dollars, unless the HKMA grants an exemption or alternative arrangement.The HKMA retains the discretion to impose additional financial resource requirements or set higher capital thresholds as a condition of granting or maintaining a licence. The financial resources allocated to meet these requirements should only be used for the purposes of the licensee’s business activities and should not be used for any dealing with its related companies or parties.
Risk Management	Governance and Oversight	A licensee engaged in stablecoin activities should implement robust risk management policies and procedures tailored to their size and complexity.This includes a clear governance structure with defined roles for the Board and senior management, documented risk management frameworks, regular reviews, independent audits, and timely risk reporting to both management and the HKMA.
	Financial, Technology, and Security Controls	Licensees should prudently manage reserve assets to meet all redemption requests, even under stress. This involves setting internal limits, conducting stress tests, and managing credit, liquidity, and market risks.Technology and security risks must be addressed through comprehensive IT controls, smart contract management, wallet and account security, cybersecurity, oversight of third-party providers, ongoing monitoring, and independent audits.
	Token Management	For each specified stablecoin it issues, the licensee should clearly document (i) the token standards used, (ii) the distributed ledgers on which such specified stablecoins are issued, and (iii) the architecture of all smart contracts (including token contract, proxy contract, multi-signature contracts, etc.) in respect of such specified stablecoins.A licensee should identify all operations in relation to the management of the full lifecycle of each specified stablecoin it issues, which should cover deploy, configure, mint, burn, upgrade, pause, resume, blacklist, remove blacklist, freeze, remove freeze, whitelist, usage of any operational wallets, etc. The licensee should also engage a qualified third party entity to audit the smart contracts in respect of such specified stablecoins on at least an annual basis in order to ensure the smart contracts, to ensure that the smart contracts (i) are implemented correctly, (ii) consistent with the intended functionalities, and (iii) are, to a high level of confidence, not subject to any vulnerabilities or security flaws.
	Wallet and Private Key Management	A licensee should put in place effective wallet and private key management policies and procedures to ensure the security and integrity of the operations in relation to the specified stablecoins it issues.A licensee should put in place robust controls and procedures for private key management covering its full lifecycle, including but not limited to key generation, distribution, storage, usage, back-up, recovery, destruction, etc. The licensee should identify all seeds and/or private keys relevant to the management of the specified stablecoins it issues, and adopt measures which comply with detailed requirements set out in the Supervision Guideline but on a ‘scale proportionate’ to the significance of the seeds and private keys. In particular, the HKMA has noted that it expects seeds and private keys should be safeguarded in secure storage media, such as HSM with appropriate certification, in a secure facility with stringent access control and monitoring systems located in Hong Kong, or at a location acceptable to the HKMA.
	Account Management	During the customer on-boarding process, a licensee should adopt an effective authentication method to establish and verify the identity of a potential customer having regard to the nature of the customer (i.e. natural or non-natural person).When fulfilling a customer’s request for issuance or redemption, a licensee should transfer funds only to and accept fund transfers from the customer’s pre-registered accounts, as well as transfer specified stablecoins only to and accept transfers of specified stablecoins from the customer’s pre-registered wallet addresses or accounts. A licensee should also establish effective monitoring mechanisms to prevent, detect and block unauthorised access to customers’ accounts and fraudulent transactions in relation to customers’ accounts.
	Operational Risks / Incident Management	Comprehensive incident management, business continuity, and exit plans must be established, regularly tested, and approved by the board of the licensee. The HKMA must be promptly notified of any significant incidents or changes that could affect stablecoin redemption.
Corporate Governance		Licensees must establish effective governance structures which correspond to the scale and complexity of their stablecoin operations.Controllers of licensees, chief executives, directors, and stablecoin managers (where the licensee is an authorized institution) should be fit and proper to hold their roles and must be approved by the HKMA. Officers who are responsible for the day-to-day management and operation of the licensee’s licensed stablecoin activities must also possess appropriate knowledge and experience to discharge their responsibilities. Any changes in managerial appointments or responsibilities must be promptly reported to the HKMA. All managers must be assessed for suitability, with clear processes for selection, training, and addressing breaches.
Business Practices and Conduct		Licensees shall maintain robust information and accounting systems that accurately record business activities, ensure compliance with Hong Kong’s regulatory and accounting standards, and remain accessible for regulatory review. They should also keep accurate records and submit annual audited financial statements to the HKMA.Licensees must publish a white paper in respect of each type of specified stablecoin it uses. This white paper should be published on the licensee’s website and material changes to the paper should be notified to the HKMA before being made.

III. The AML/CFT Consultation

As noted above, the HKMA is also seeking industry feedback on its AML/CFT Consultation, which sets out a range of AML/CFT requirements which the HKMA proposes imposing on stablecoin issuers. The HKMA has signalled that it has taken a range of factors into consideration in formulating the proposed AML/CFT requirements, including the following:

Potential risks associated with stablecoin activities: The AML/CFT Consultation observes that stablecoins, like other virtual assets, present significant ML/TF risks due to the inherent anonymity, global accessibility, and the potential for complex fund layering associated with stablecoin transactions. The HKMA considers that these risks are further heightened when stablecoins are used in conjunction with unhosted wallets, which facilitate peer-to-peer transfers without the involvement of regulated intermediaries or the creation of blockchain records. However, the HKMA also recognises the traceability advantages offered by blockchain technology, which provides transparent and immutable records of all on-chain transactions, and considers that this transparency can assist in the identification of suspicious activities, even when obfuscation tools are employed.

Alignment with international standards: International AML/CFT standards generally place obligations on intermediaries between individuals and the financial system. While the minting and burning of stablecoins by an issuer is not considered to be intermediating activity, stablecoin issuers will be considered intermediaries when they offer, redeem, or facilitate stablecoin transactions. Consequently, the HKMA proposes to treat stablecoin issuers as financial institutions under the Anti-Money Laundering and Counter-Terrorism Financing Ordinance (Cap. 615) (AMLO).

In light of these considerations, the HKMA intends to require licensed issuers to adopt a range of AML/CFT policies and controls to manage ML/TF risks associated with their stablecoin operations. At a minimum, these should include institutional risk assessments, governance and oversight, controls against terrorist financing and sanctions, suspicious transaction reporting, and record-keeping. Each of these requirements should be proportionate to the nature and scope of the licensee’s activities.

The table below summarises the specific AML/CFT requirements proposed for licensed stablecoin issuers, as well as the specific questions the HKMA is seeking feedback on:

Regulatory Area	Key Requirements / Expectations	Details
Stablecoin Issuance and Redemption	The HKMA is seeking industry feedback on the following aspects of its proposals with regards to issuance and redemption: Whether due diligence measures should be required for institutions (e.g. financial institutions or virtual asset service providers (VASPs)) providing custodial wallets for stablecoin holders at both the issuance and redemption stages; Whether additional controls should be introduced to mitigate the risks associated with unhosted wallets in the context of stablecoin issuance and redemption; and Any other suggestions to strengthen the regulatory approach to stablecoin issuance and redemption from a risk mitigation perspective.
	Customer Due Diligence and Rights	For both the issuance and redemption of stablecoins, licensees must conduct due diligence on all customers. This includes individuals and legal entities with ongoing business relationships, as well as those conducting occasional transactions of HK$8,000 or more.In the case of redemption, licensees are also required to honor valid redemption requests from stablecoin holders.
	Wallet Identification and Ownership Verification	Before issuance or redemption of stablecoins, licensees must identify the relevant wallet address and verify the customer’s ownership or control of that wallet.If the wallet is custodial (e.g., provided by a VASP), the licensee must identify the institution providing the custodial wallet and perform due diligence on it.
	Additional Controls for Unhosted Wallets	The HKMA considers that unhosted wallets (i.e. those controlled directly by users rather than institutions) present heightened risks in both issuance and redemption situations.To mitigate these risks, licensees must implement additional controls before transferring stablecoins to, or accepting stablecoins from, unhosted wallets. These controls shall include: Enhanced monitoring of transactions involving unhosted wallets; Only transferring to or accepting from unhosted wallets that have been assessed as reliable, based on transaction and wallet screening; and Imposing transaction limits where appropriate
Ongoing Monitoring	The HKMA is seeking industry feedback on the following aspects of its proposals with regards to ongoing monitoring: Whether licensees should conduct ongoing monitoring for its customers to detect potential illicit activities for their specified stablecoins.
	Risk-based transaction monitoring systems	Given the ML/TF risks associated with stablecoins, and the fact that they have an identifiable legal issuer, licensees are required to implement effective, risk-based transaction monitoring systemsThese systems should: Monitor the destination of stablecoin transactions at the point of issuance. Monitor the source of stablecoin transactions at the point of redemption. Leverage available technologies to track stablecoin movements on the blockchain. Identify, report and take follow-up actions regarding suspicious transactions.
	Screen stablecoin transactions and wallet addresses	Licensees shall establish systems and controls to screen stablecoin transactions and associated wallet addresses. This includes the use of blockchain analytics tools to: Trace transaction histories to accurately determine the source and destination of stablecoins. Detect transactions involving wallet addresses that are directly or indirectly linked to illicit activities or designated parties.
Stablecoin Transfers	The HKMA is seeking industry feedback on the following aspects of its proposals with regards to stablecoin transfers: To what extent should licensees comply the special requirements for virtual asset (VA) transfers set out in section 13A of Schedule 2 of the AMLO?
	Section 13A of Schedule 2 of the AMLO applies the Travel Rule to VA transfers. The HKMA has proposed extending these requirements to stablecoin transfers on the basis that stablecoins are a type of VA as defined under the AMLO.
Additional measures for ongoing monitoring of stablecoins circulated in secondary markets	The HKMA is seeking industry feedback on the following aspects of its proposals with regards to additional monitoring in the secondary markets: Whether the industry agrees that licensees should be required to implement adequate and appropriate systems and controls to effectively prevent or combat the abuse of stablecoins transacted to or from unhosted or unregulated wallets for ML/TF purposes; If yes, suggestions regarding possible risk mitigation measures for stablecoin transactions involving unhosted wallet addresses, taking into account the different roles of ecosystem participants such as issuers, intermediaries, and banks; and The extent to which licensees should be held accountable for monitoring stablecoin transactions in the secondary market, and views on how such additional measures should be implemented (e.g. scope, analytics frequency, and control mechanisms).
	Licensees should adopt proportionate and ongoing monitoring practices to mitigate the risk of stablecoins being used for illicit purposes. These may include: Limiting the primary distribution and redemption of stablecoins to financial institutions and VASPs with strong AML/CFT controls. Using appropriate solutions (e.g. blockchain analytics tools) to continuously screen transactions and wallet addresses beyond the primary distribution venues. Blacklisting wallet addresses linked to sanctions or illicit activities. Implementing other effective measures such as whitelisting wallet addresses or adopting a closed-loop system that restricts circulation to trusted entities. The HKMA expects license applicants to consider international standards and available technological solutions when designing safeguards in this space. The HKMA has indicated that it is open to industry proposals, provided they align with the overarching principle of preventing misuse of stablecoins in secondary markets.

The HKMA has also noted that it is also developing supplementary AML/CFT guidance for digital asset activities, such as stablecoin issuance and custodial services. This aims to align with SFC guidelines to ensure consistent regulation across institutions performing similar activities. Industry consultation is planned for later in 2025.

IV. Conclusion

The passage of the Ordinance and release of the Consultation Papers are key milestones in the development of Hong Kong’s regulatory landscape for stablecoin issuers and offerors. Stakeholders are encouraged to review the Consultation Papers and submit feedback by June 30, 2025. In the meantime, we recommend stablecoin issuers to evaluate their current operations to ensure readiness for the forthcoming regulatory changes.

[1] “Government welcomes passage of Stablecoins Bill”, published by the Hong Kong Government on May 21, 2025, available here.

[2] Stablecoins Ordinance (Cap. 656) in gazette, available here.

[3] “Consultation Draft Guideline on Supervision of Licensed Stablecoin Issuers”, published by the HKMA on May 26, 2025, available here.

[4] “Consultation Paper on the Proposed AML/CFT Requirements for Regulated Stablecoin Activities”, published by the HKMA on May 26, 2025, available here.

[5] Stablecoins Bill, available at https://www.legco.gov.hk/yr2024/english/bills/b202412064.pdf

[6] “Hong Kong’s Regulators Publish Consultation Conclusions on Legal Framework for Stablecoin Issuers”, published by Gibson, Dunn & Crutcher on September 10, 2024, available at: https://www.gibsondunn.com/hong-kongs-regulators-publish-consultation-conclusions-on-legal-framework-for-stablecoin-issuers/

[7] “Paper for the House Committee – Report of the Bills Committee on Stablecoins Bill”,published by the Hong Kong Legislative Council on May 9, 2025, available here.

[8] “Report of the Bills Committee on Stablecoins Bill”, published by the Hong Kong Legislative Council on May 15, 2025, available here.

The following Gibson Dunn lawyers prepared this update: William Hallatt, Emily Rumble, Arnold Pun, and Macy Chung*.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact any member of Gibson Dunn’s Financial Regulatory team, including the following members in Hong Kong:

William R. Hallatt (+852 2214 3836, whallatt@gibsondunn.com)
Emily Rumble (+852 2214 3839, erumble@gibsondunn.com)
Arnold Pun (+852 2214 3838, apun@gibsondunn.com)
Becky Chung (+852 2214 3837, bchung@gibsondunn.com)
Jane Lu (+852 2214 3735, jlu@gibsondunn.com)

*Macy Chung is a trainee solicitor in the firm’s Hong Kong office who is not yet admitted to practice law.

Rethinking Motions Panel Rules in Age of Trump 2.0 Litigation
The National Law Journal
By Avalon Zoppo
June 2, 2025

Motions panels in the U.S. Court of Appeals for the District of Columbia Circuit and other federal appellate courts have been busy over the last few months resolving a stream of emergency relief requests in challenges to President Donald Trump’s policies.

“With all of these applications for emergency relief from district court injunctions or TROs in these very important, high profile, politically charged cases, you’d think [that] would be putting a strain on the resources,” University of Pittsburgh law professor Arthur Hellman said, referring to temporary restraining orders. “What we’re seeing here is another downstream effect of forum shopping, and that reinforces the desirability of looking for measures that would limit [the effects].”

So what can courts do if there’s an abnormally high workload for rotating motions panels?

Duke University law professor Marin Levy raised the question in a BlueSky post last month, suggesting that some circuits might consider reducing the time a panel sits to offset a heavy workload.

The federal appeals courts have different procedures for motions panels, which Levy detailed in her recent book with Second Circuit Judge Jon Newman called “Written and Unwritten: The Rules, Internal Procedures, and Customs of the United States Courts of Appeals.”

In the D.C. Circuit, for instance, a rotating, randomly selected three-judge special panel sits for about two months during the regular sitting term. In contrast, the Eighth Circuit has three separate three-judge panels called “administrative panels” who act on applications for stays pending appeal, with the judges randomly selected by the chief judge and changing each month, according to the book.

Becky James, a Waymaker partner who clerked on the Ninth Circuit, agreed that a stream of substantive motions could put a strain on judges.

It’s typical for motions panels to grant or deny with no explanation, and oral argument is not a given. But in many motions in challenges to Trump’s policies, panels are hearing arguments and at times, issuing decisions with dozens of pages of dissenting or concurring opinions attached.

A D.C. Circuit motions panel’s order from March that denied the Trump administration’s request for a stay in a case over Alien Enemies Act deportations was accompanied with 93 pages of concurrences and dissents and only two days after oral arguments.

“Obviously just the volume and the nature of the cases is different than what motions panels usually hear,” James said.

“Motions are usually fairly straightforward,” she added. “It’s not really worked into [judges’] calendar assignments necessarily to take on really substantive matters on their motions panel.”

James said judges could pull more of their clerks into that work as opposed to relying mostly on staff attorneys who handle motions.

Hellman said circuits could tweak procedures to add “back-up motions panels” if there is an overwhelming workload. But tweaking procedures in larger circuits such as the Ninth may be easier than in other, smaller ones like the First, where work can’t be spread out as easily, he added.

“The Ninth Circuit could easily … adjust the rules to say that, if by the 15th of the month more than X number of substantive motions have been submitted, the clerk shall select judges for a second motions panel or lunch motions panel to get in,” Hellman said.

Former Fifth Circuit Judge Gregg Costa, now a Gibson, Dunn & Crutcher partner, said there are benefits to the way the Fifth Circuit approaches assigning motions.

The Fifth Circuit doesn’t have a single motions panel. Instead, the court clerk creates an assignment log each court year that lists the active judges in random order. As motions and emergency matters requiring judges’ attention arise, they are assigned to three judges based on the order of the list, according to Levy and Newman’s book.

“[The Fifth Circuit’s approach] spreads out the work and prevents a single panel from being inundated with motions at a particular time,” Costa stated via email.

“It also prevents litigants from being able to know who will be on the motions panel,” he added. “In the circuits with a single motions panel each month, that allows some litigants to strategically time when they file motions. So the system the Fifth Circuit uses seems better both in terms of judicial workload and preventing gamesmanship.”

Thomas Vanaskie, a former Third Circuit judge, agreed that the type of cases that motions panels are currently seeing could be putting a strain on staff attorneys handling motions.

“I can see the staff being overwhelmed because they’re expected to do a pretty full workup on each motion, at least in the Third Circuit. And that can be extremely challenging,” he said.

Hellman said circuits in the past have responded to influxes in cases—not necessarily motions panel work—by tweaking procedures.

He pointed to the Second Circuit in the early 2000s, when the court saw a surge in petitions challenging Board of Immigration Appeals decisions. At that time, the court responded by establishing a special ‘non-argument calendar” for cases involving a challenge to the BIA’s denial of an asylum claim, according to a 2008 law review article by Newman.

“[There was] a change in the way the DOJ handled immigration cases, and two circuits were hit hardest—the Second and the Ninth,” Hellman said, referring to the U.S. Department of Justice. “They both used all sorts of innovative procedures to cope with the flood.”

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Reprinted with permission from the June 2, 2025 edition of “The National Law Journal” © 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

The U.S. enforcement environment governing international trade has intensified significantly in 2025. Since the start of the Trump Administration’s second term, U.S. trade policy has seen a sharp resurgence in unilateral tariffs accompanied by the risk of False Claims Act scrutiny, alongside an emphasis on increased sanctions and export enforcement under the administration’s America First Trade Policy. Enforcement activity continues to target specific countries and sectors, with sustained attention on sanctions, export controls, tariffs, and antiboycott regulations. From escalating tariff measures to multi-agency regulatory actions, understanding the evolving compliance expectations is more critical than ever. In this webinar, we examine the key enforcement trends, policy shifts, and practical compliance strategies shaping today’s global trade landscape.

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PANELISTS:

F. Joseph Warin is Co-Chair of Gibson Dunn’s global White Collar Defense and Investigations Practice Group, and he is chair of the Washington, D.C. office’s 200-person Litigation Department. Mr. Warin is ranked annually in the top-tier by Chambers USA, Chambers Global, and Chambers Latin America for his FCPA, fraud and corporate investigations experience. Mr. Warin has handled cases and investigations in more than 40 states and dozens of countries involving federal regulatory inquiries, criminal investigations and cross-border inquiries by international enforcers, including UK’s SFO and FCA, and government regulators in Germany, Switzerland, Hong Kong, and the Middle East. He has served as a compliance monitor or counsel to the compliance monitor in three separate FCPA monitorships, pursuant to settlements with the SEC and DOJ.

Matt Axelrod is a nationally recognized white collar defense lawyer with deep criminal, national security, and export enforcement experience. Matt’s practice focuses on internal investigations, crisis management, and white collar criminal defense for U.S. and multinational companies. Matt is the only person to have served as both the Assistant Secretary for Export Enforcement at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and Principal Associate Deputy Attorney General at the U.S. Department of Justice (DOJ) — a role described in the New York Times as “the most demanding job in all of DOJ.” His over 25 years of combined government enforcement and white-collar defense experience are why clients consistently rely on Matt to help them navigate their most sensitive and complex matters. Matt co-chairs the firm’s Sanctions and Export Enforcement practice, where he works closely with clients to conduct internal investigations, evaluate compliance programs, advise on voluntary self-disclosures, and defend against government-facing investigations.

Adam M. Smith is a partner in the Washington, D.C. office of Gibson Dunn and serves as co-chair of the firm’s International Trade Advisory and Enforcement and Sanctions and Export Enforcement Practice Groups. He is an experienced international lawyer with a focus on international trade compliance and white collar investigations, including federal and state economic sanctions enforcement, CFIUS, the Foreign Corrupt Practices Act, embargoes, and export and import controls. Clients benefit from Adam’s experience in the Obama Administration, where he was Senior Advisor to the Director of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and Director for Multilateral Affairs on the National Security Council. At OFAC, he was instrumental in shaping and enforcing sanctions policies, briefing congressional and private sector leaders, conducting extensive international outreach, and negotiating complex agreements. On the National Security Council, he advised the President on international sanctions, coordinated inter-agency efforts, and developed strategies to counter corruption and promote asset recovery.

Christopher T. Timura is a partner in the Washington, D.C. office of Gibson Dunn and a member of the firm’s International Trade Advisory and Enforcement, Sanctions and Export Enforcement, and White Collar Defense and Investigations Practice Groups. Christopher helps clients solve regulatory, legal and political problems that arise at the intersection of national security, trade, and foreign policy, and to develop corporate social responsibility (CSR) and environmental, social, and governance (ESG) strategies, policies, and procedures. His clients span sectors and range from start-ups to Global 500 companies. In 2022, Christopher was appointed to the Department of Commerce Bureau of Industry and Security Regulations and Procedures Technical Advisory Committee, where he chairs its export control enforcement working group. Most recently, Christopher was ranked in the Chambers Global 2024 guide for USA International Trade: Export Controls & Economic Sanctions.

Samantha Sewall is of counsel in the Washington, D.C. office of Gibson Dunn and a member of the firm’s International Trade Advisory and Enforcement and Sanctions and Export Enforcement Practice Groups. She advises clients on compliance with U.S. legal obligations at the intersection of global trade, foreign policy, and national security, focusing her practice on compliance with U.S. economic sanctions, export controls, national security reviews of foreign direct investment (CFIUS), customs, and anti-boycott laws. Samantha has experience advising companies across a wide range of sectors including aerospace, banking and financial institutions, defense, energy, medical devices and pharmaceuticals, shipping, retail, telecommunications, and travel.

We are pleased to provide you with the May edition of Gibson Dunn’s monthly U.S. bank regulatory update. Please feel free to reach out to us to discuss any of the below topics further.

KEY TAKEAWAYS

The GENIUS Act, establishing a statutory framework for payment stablecoins, moved closer to a full Senate vote after Democrats announced a number of amendments.
Acting on priorities outlined by Acting Chairman Travis Hill in his January 2025 statement, the Federal Deposit Insurance Corporation (FDIC) rescinded its 2024 Statement of Policy on Bank Merger Transactions and reinstated the prior Statement of Policy on Bank Merger Transactions. The FDIC again indicated it plans to conduct a broader reevaluation of its bank merger review process.
In similar fashion, the Office of the Comptroller of the Currency (OCC) adopted an interim final rule to restore the streamlined application and expedited review to its procedures for reviewing applications under the Bank Merger Act (BMA) and rescinded its 2024 policy statement on its review of applications under the BMA. The Senate and House passed a joint Congressional Review Act (CRA) resolution nullifying the OCC’s 2024 final rule. The CRA resolution has not been signed into law.
The OCC continued to revamp its approach to digital assets, clarifying that national banks and federal savings associations may buy and sell assets held in custody on a customer’s behalf at the direction of the customer and are permitted to outsource to third parties bank-permissible crypto-asset activities, including custody and execution services, subject to appropriate third-party risk management practices.
The Consumer Financial Protection Bureau (CFPB) withdrew 67 guidance documents, including interpretive rules, policy statements, advisory opinions and compliance bulletins. The withdrawals are applicable as of May 12, 2025. The CRA resolutions to repeal the CFPB overdraft rule and larger participant rule for digital payment companies were signed into law. The CFPB also rescinded its May 2022 interpretive rule regarding the scope of state enforcement under Section 1042 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
The CFPB also noted that it plans to vacate its Section 1033 open banking rule in a status report filed in the U.S. District Court for the Eastern District of Kentucky, stating “[a]fter reviewing the Rule and considering the issues that this case presents, Bureau leadership has determined that the Rule is unlawful and should be set aside.” The CFPB indicated it intends to file a motion for a summary judgment in the case by May 30, 2025.
The federal financial services regulatory agencies’ leadership teams continue to evolve.
- In an unsigned opinion, the Supreme Court signaled that members of the Federal Reserve Board and other members of the Federal Open Market Committee cannot be terminated by the President without cause, by virtue of for-cause removal protections. In its opinion, the Court explained that the “Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” distinguishing it from other independent agencies.
- The Senate Banking Committee advanced out of committee the nomination of Michelle Bowman to be the Federal Reserve Board’s Vice Chair for Supervision. Jonathan Gould’s nomination to be the next Comptroller of the Currency previously advanced out of committee. Each awaits Senate confirmation.
- Secretary of the Treasury Scott Bessent announced President Trump’s intent to nominate Jonathan McKernan to serve as Undersecretary of Domestic Finance at the U.S. Department of the Treasury. McKernan’s nomination to serve as Director of the CFPB was withdrawn.
- The Acting Chair of the Commodity Futures Trading Commission (CFTC) Caroline Pham announced her departure once Brian Quintenz is confirmed as Chairman. CFTC Commissioners Summer Mersinger and Christy Goldsmith Romero announced they will step down at the end of May 2025 and Commissioner Kristin Johnson announced she will step down “later this year.”
- Vacancies remain on the boards of the FDIC and National Credit Union Administration.

DEEPER DIVES

FDIC and OCC Rescind Biden Administration Changes to Agency Review of Bank Merger Transactions. On May 8, 2025, the OCC adopted an interim final rule to restore the streamlined application and expedited review to its procedures for reviewing applications under the BMA and rescinded its 2024 policy statement on its review of applications under the BMA. (On May 7 and May 20, 2025, the Senate and House, respectively, passed a joint Congressional Review Act resolution nullifying the OCC’s 2024 final rule.) On May 20, 2025, the FDIC rescinded its 2024 Statement of Policy on Bank Merger Transactions and reinstated the prior Statement of Policy on Bank Merger Transactions, effective 30 days after publication in the Federal Register.

Insights. Although the changes mitigate or eliminate some of the issues created by the September 2024 changes to the agencies’ evaluations of merger transactions, more remains to be done to establish a process that maximizes predictability, efficiency and transparency for institutions of all sizes regardless of federal regulator. In that connection, the FDIC again indicated it plans to conduct a broader reevaluation of its bank merger review process.As in September 2024, the FDIC and OCC moves on changes to the agencies’ approach to evaluating transactions subject to approval under the BMA appear coordinated. Absent, though, was any coordinated action by the U.S. Department of Justice (DOJ). In September 2024, the DOJ announced the 2023 Merger Guidelines will be the “sole and authoritative statement across all industries.” The DOJ move expanded bank merger analysis beyond the traditional—and more predictable—assessment of local branch overlaps and HHI screens, into a “comprehensive and flexible framework,” considering issues such as the impact at the branch level with respect to individual lines of business, particular customer segments, or the quality/nature of customer service, and across broader geographic regions. At this time, it is unclear whether the 2023 Merger Guidelines will remain the “sole and authoritative statement across all industries,” though the 2023 Merger Guidelines do contain a HHI threshold (1,800/100) and a market share threshold (30% plus change in HHI of 100) for establishing a rebuttable presumption of anticompetitive harm.

OCC Clarifies Bank Authority to Engage in Certain Crypto-Related Activities. On May 7, 2025, the OCC published Interpretive Letter No. 1184 clarifying that national banks and federal savings associations may buy and sell assets held in custody on a customer’s behalf at the direction of the customer and are permitted to outsource to third parties bank-permissible crypto-asset activities, including custody and execution services, subject to appropriate third-party risk management practices.

Insights. Since the change in administration, the federal banking agencies have continued to signal increased receptivity to crypto-related activities and digital assets in the industry on behalf of clients, in all cases subject to the requirement that all activities be conducted in a safe and sound manner, consistent with all applicable laws and regulations. In practice, banks are still expected to engage with the Federal Reserve, FDIC and OCC regarding proposed crypto-related activities—as noted by the FDIC in FIL-7-2025, banks “should consider the associated risks … and should engage with their supervisory team as appropriate.”As we have previously discussed, crypto-related activities and product offerings may present thorny legal authority/permissibility issues under law or raise safety and soundness concerns, all of which must continue to be evaluated by institutions. Aside from buying, selling and issuing stablecoins to facilitate payments (OCC Interpretive Letter No. 1174), limitations remain on banks’ authority to engage in crypto-related activities as principal. Further, as noted by Acting Chairman Hill in his April 8, 2025 update on key policy issues, “one specific area that merits attention is the use of public, permissionless blockchains by banks.” The Federal Reserve’s Policy Statement on Section 9(13) of the Federal Reserve Act notes in the preamble to the final rule that the Federal Reserve “generally believes that issuing tokens on open, public, and/or decentralized networks, or similar systems is highly likely to be inconsistent with safe and sound banking practices.”

Agency	Actions
FDIC	Confirmed that FDIC-supervised institutions (i) may engage in “permissible crypto-related activities”* without receiving prior FDIC approval and (ii) “should consider the associated risks … and should engage with their supervisory team as appropriate.”Withdrew from the “Joint Statement on Crypto-Asset Risks to Banking Organizations” (Jan. 3, 2023) and the “Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities” (Feb. 23, 2023) (together, the Joint Statements). * Although the FDIC broadly defines “permissible crypto-related activities” to include: acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems, including performing node functions; as well as related activities such as finder activities and lending, the footnote explaining “permissible” in FIL-7-2025 cites only to the OCC Interpretive Letters described below as examples of “permissible” activities.
Federal Reserve	Confirmed that (i) state member banks may engage in permissible crypto-asset activities without providing advance notification and (ii) the Federal Reserve will monitor banks’ crypto-asset activities through the “normal supervisory process.”Withdrew from the Joint Statements. Policy Statement on Section 9(13) of the Federal Reserve Act remains effective (describing limitations on state member banks’ authority to engage in crypto-related activities as principal).
OCC	Rescinded the requirement that OCC-supervised institutions receive supervisory nonobjection before they can engage in activities described in OCC Interpretive Letters Nos. 1170, 1172, and 1174 (crypto-asset activities) and confirmed those crypto-asset activities will be examined as part of the OCC’s “ongoing supervisory process.”Published Interpretive Letter No. 1183 to confirm the following are permissible for national banks and federal savings associations: crypto-asset custody services for customers (Interpretive Letter No. 1170), holding reserves for stablecoin issuers (Interpretive Letter No. 1172), and using independent node verification networks and stablecoins to facilitate bank-permissible activities, including payments (Interpretive Letter No. 1174). Published Interpretive Letter No. 1184 (see above). Withdrew from the Joint Statements.

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CFPB Continues Deregulatory Push. On May 12, 2025, the CFPB withdrew 67 guidance documents, including interpretive rules, policy statements, advisory opinions and compliance bulletins. The withdrawals are effective as of May 12, 2025. On May 15, 2025, the CFPB rescinded its May 2022 interpretive rule regarding the scope of state enforcement under Title X of the Dodd-Frank Act. The newly issued interpretive rule is effective May 15, 2025. Finally, on May 23, 2025, the CFPB notified the U.S. District Court for the Eastern District of Kentucky that it intends to vacate its 1033 open banking rule.

Insights. The withdrawals include 8 policy statements, 7 interpretive rules, 13 advisory opinions and 39 other pieces of guidance across a range of topics. The withdrawals are consistent with actions taken to date to narrow the CFPB’s mandate, as is the decision to vacate the 1033 open banking rule. The actions, though, have the potential to create a whipsaw effect for legal and compliance functions should future administrations re-empower the CFPB in any of these areas. Further, it is unclear whether the current administration will propose a new Section 1033 open banking rule or if the administration intends to implement one at all.

House Financial Services Committee Remains Active. On May 21, 2025, the U.S. House Financial Services Committee announced it had advanced out of committee 25 bills, many of which are designed to reshape bank regulation and supervision.

Insights. Although enactment of any of these bills into law is not guaranteed, certain themes emerge from a review of certain bills that are worth highlighting as continued areas of focus by the House Financial Services Committee, Senate Banking Committee, regulators and other stakeholders.

Bill (Topic)	Aim	Other Commentary
Bank Failure Prevention Act (timely BMA application decisions)	Establishes “shot clock” for federal regulators to act on BMA applications	Bowman (here); Acting FDIC Chairman Hill (here); Chairman French Hill (R-AR) (here)
Taking Account of Institutions with Low Operation Risk (TAILOR) Act (regulatory tailoring)** introduced in Senate as well	Requires federal financial regulatory agencies to tailor federal regulation based on banks’ specific risk profiles and business models	Bowman (here; here; here); Hill (here); Chairman French Hill (here)
Financial Institution Regulatory Tailoring Enhancement Act (regulatory tailoring)	Increases from $10 billion to $50 billion the asset thresholds at which financial institutions become subject to certain requirements (e.g., Volcker, Durbin amendment, CFPB supervision)	Bowman (here; here; here); Hill (here); Acting Comptroller Hood (here); Chairman French Hill (here)
Fair Audits and Inspections for Regulators’ (FAIR) Exams Act (supervisory findings appeals process)	Establishes new appeals processes for financial institution supervisory determinations	Hill (here); Chairman French Hill (here; here; here)
Halting Uncertain Methods and Practices in Supervision (HUMPS) Act (CAMELS ratings)	Requires the regulatory agencies to update the CAMELS rating system, particularly the “Management” component	Bowman (here); Hill (here); Chairman French Hill (here)
FIRM Act (debanking)** introduced in Senate as well	Limits use of reputational risk in examination reports	Hill (here); Chairman French (here; here); Jonathan Gould Gould (nominee) (here)

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OTHER NOTABLE ITEMS

Speech by Vice Chair Jefferson on Liquidity Facilities. On May 19, 2025, Federal Reserve Board Vice Chair Jefferson gave a speech titled “Liquidity Facilities: Purposes and Functions.” In his speech, Vice Chair Jefferson noted that the discount window has been used more than was the case before the pandemic.

FDIC Board of Directors Meeting. At the FDIC Board meeting on May 20, 2025, the FDIC Board reviewed the Deposit Insurance Fund Restoration Plan. In his remarks on the plan, Acting Chairman Hill noted that FDIC staff “project that the reserve ratio is likely to reach the statutory minimum of 1.35 percent ahead of the statutory deadline and recommend no changes to the Restoration Plan.” He also offered that the FDIC Board should consider “whether insured deposits is the right metric to measure the [Deposit Insurance Fund’s] exposure to losses,” indicating that FDIC staff, at his request, is analyzing an alternative permitted by the Federal Deposit Insurance Act to use total liabilities rather than insured deposits as the denominator of the reserve ratio.

FDIC Publishes 2025 Risk Review. On May 13, 2025, the FDIC published its 2025 Risk Review providing an overview of market and credit risks to banks in 2024. The risk review identified market risks arising from higher interest rates and an inverted yield curve during much of 2024 as an ongoing key risk to the industry. It noted that on-balance-sheet liquidity levels were “stable” in 2024, deposits increased for the first time since 2021 “as uninsured deposit growth resumed,” and wholesale funding growth slowed with the ratio of wholesale funds to total assets being “within pre-pandemic norms.” The risk review also highlighted asset quality deterioration in certain commercial real estate and consumer loan portfolio as the second key risk to banks in 2024.

Acting Comptroller Hood Discusses OCC Priorities. On May 8, 2025, Acting Comptroller Hood gave remarks at the Building Societies Annual Conference (Birmingham, England). In his remarks, Acting Comptroller Hood continued to highlight his four key areas of strategic focus for the OCC: (1) reducing regulatory burden (“ensur[ing] that regulations are effective and not excessive so that the institutions we supervise can thrive and innovate”); (2) promoting financial inclusion (“financial inclusion is the civil rights issue of our time”); (3) embracing bank-fintech partnerships (“innovation is not optional, but essential”); and (4) expanding responsible bank activities involving digital assets (“the OCC recently reaffirmed that a range of cryptocurrency activities are permissible by the institutions we supervise”).

OCC Publishes Interest Rate Risk Statistics Report. On May 14, 2025, the OCC published the spring 2025 edition of the Interest Rate Risk Statistics Report. The report presents interest rate risk data gathered during examinations of OCC-supervised midsize and community banks and federal savings associations.

OCC Issues RFI on Challenges Faced by Community Banks in Adoption and Implementation of Digital Banking Solutions. On May 5, 2025, the OCC issued a request for information (RFI) seeking input from community banks regarding the challenges and barriers faced in adopting and implementing digitalization strategies and initiatives. The RFI’s focus includes topics such as governance; diligence; third-party risk management; costs; use of AI and machine learning; and data sharing and tech interoperability. Responses to the RFI are due within 45 days of the date of publication in the Federal Register.

OFR Blog on Banks’ Unrealized Losses in Securities Portfolios. On May 15, 2025, the Office of Financial Research published a blog post, “The State of Banks’ Unrealized Securities Losses.” The post found that higher Treasury yields have kept unrealized securities losses at elevated levels, albeit lower than their highest levels reached in the third quarter of 2022. The post estimates that as of December 31, 2024, aggregate unrealized securities losses remained elevated at $481 billion, “approximately an average of 8.6% of the fair value of their aggregate securities holdings and 19.9% of the aggregate equity held at the banking subsidiaries.”

Joint Study Explores Feasibility of Central Bank Operations Using Tokenization and Smart Contracts. The Federal Reserve Bank of New York and the Bank for International Settlements published a joint research study that found that central banks could customize and deploy policy implementation tools using programmable smart contracts in a potential future state where commercial banks and other private sector financial institutions have widely adopted tokenization for wholesale payments and securities settlement.

Speech by Governor Cook on Financial Stability. On May 23, 2025, Federal Reserve Board Governor Lisa Cook gave a speech titled “A View on Financial Stability.” In her speech, Governor Cook focused on overall financial stability and ongoing uncertainty and risks. She highlighted ongoing risk and uncertainty in the system, as well as the importance of better understanding the interaction of banks and nonbanks and how that may impact overall financial stability and market shock absorption.

Speech on Recent Developments in Treasury Market Liquidity and Funding Conditions. In remarks on May 9, 2025, Roberto Perli, manager of the Federal Reserve’s System Open Market Account, discussed recent developments in U.S. Treasury market liquidity. On May 13, 2025, the Federal Reserve Bank of New York’s Teller Window highlighted Perli’s speech.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Ro Spaziani, and Rachel Jackson.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work or any of the member of the Financial Institutions practice group:

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Ro Spaziani, New York (212.351.6255, rspaziani@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

M. Kendall Day, Washington, D.C. (202.955.8220, kday@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (202.955.8507, sweed@gibsondunn.com)

Ella Capone, Washington, D.C. (202.887.3511, ecapone@gibsondunn.com)

Sam Raymond, New York (212.351.2499, sraymond@gibsondunn.com)

Rachel Jackson, New York (212.351.6260, rjackson@gibsondunn.com)

Zack Silvers, Washington, D.C. (202.887.3774, zsilvers@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Nathan Marak, Washington, D.C. (202.777.9428, nmarak@gibsondunn.com)

Gibson Dunn’s Immigration Task Force is available to help clients understand what these and other expected policy changes will mean for them and how to comply with new requirements.

In response to the federal government’s new rules and guidance impacting the immigration system, several legal challenges have been filed against the Trump Administration. This update outlines the background and status of certain notable lawsuits: (1) challenges to the invocation of the Alien Enemies Act to remove Venezuelan nationals allegedly connected to the gang Tren de Aragua; (2) a challenge to the removal of Kilmar Armando Abrego Garcia, a Salvadoran national who was lawfully present in the United States; (3) a challenge to the termination of the Temporary Protected Status designation for Venezuelans; (4) challenges to the termination of birthright citizenship; (5) a challenge to the termination of categorial parole programs, including for Cubans, Haitians, Nicaraguans, and Venezuelans; (6) a challenge to the Department of Homeland Security rule requiring registration of certain noncitizens; (7) challenges to the revocation of certain student visas; and (8) challenges to the termination of funding for congressionally appropriated programs benefiting immigrants.

Challenges to Removal of Venezuelan Nationals Under the Alien Enemies Act

Underlying Executive Order

On March 14, 2025, President Trump issued an Executive Order invoking the Alien Enemies Act of 1798 (AEA) to require the “immediate apprehension, detention, and removal” of Venezuelan nationals age 14 and older who are members of the Venezuelan gang, Tren de Aragua.[1] The Executive Order, titled “Invocation of the Alien Enemies Act Regarding the Invasion of the United States by Tren De Aragua,” states that Tren de Aragua has invaded the United States, “perpetrated irregular warfare,” and used drug trafficking as a weapon against U.S. citizens.[2]

The AEA, enacted in 1798, authorizes the President to “apprehend[], restrain[], secure[], and remove[]” any “alien enemies” only during a declared war or invasion against the United States.[3] The AEA requires that noncitizens are provided a right of voluntary departure and must be given “reasonable time” to depart “according to the dictates of humanity and national hospitality.”[4] The AEA has been invoked only three times since its enactment, during the War of 1812, World War I and World War II.[5] During World War II, the AEA was infamously invoked in the creation of the internment camps for noncitizens from Japan, Germany, Italy, Hungary, Romania and Bulgaria.[6] Until now, the AEA has not been invoked outside of a declared war.[7]

The government began removing Venezuelan nationals promptly following the publication of the Executive Order, resulting in various legal challenges. The first lawsuit, J.G.G v. Trump, successfully obtained a nationwide injunction protecting removal for any individual subject to the Executive Order. As detailed below, however, the Supreme Court overruled that decision on procedural grounds, and plaintiffs seeking to prevent their removal under the Executive Order have since been obligated to file habeas corpus proceedings in the jurisdictions in which they are detained.[8] As of today’s date, there are at least nine separate habeas petitions pending in various federal districts.

The Initial Case: J.G.G. v. Trump

On March 15, 2025, the American Civil Liberties Union (ACLU), Democracy Forward, and the ACLU of the District of Columbia filed suit in the District of Columbia District Court seeking a temporary restraining order (TRO) against the Executive Order’s enforcement.[9] The suit was brought on behalf of five detainees who had been informed the day before that they were going to be deported, as well as a potential class consisting of “all noncitizens in U.S. custody subject to the[Executive Order].” On the day the suit was filed, at 5:00 p.m., Judge James Boasberg held a hearing to consider the plaintiffs’ motions for class certification and a TRO. When asked whether there were any imminent removals planned, the government represented that they did not know and would “investigate.”[10] When plaintiffs’ counsel interjected that two removal flights were scheduled to depart during the time of the hearing, Judge Boasberg adjourned the hearing at 5:22 p.m. to allow the government to confirm whether any flights were scheduled to depart.[11] The hearing resumed at 6:00 p.m., but the government continued to represent that they had no information to share.[12] Around 6:45 p.m., Judge Boasberg verbally entered a nationwide TRO order to prevent the removal of the any members of the putative class for 14 days, concluding that (1) the AEA does not provide a basis for removal under the Executive Order, (2) “a brief delay in [the plaintiffs’] removal does not cause the government harm,” and (3) the plaintiffs face irreparable harm since they will be deported to “prisons in other countries or even back to Venezuela where they face persecution or worse.”[13] During the hearing, Judge Boasberg also ordered the government to “immediately” comply with the TRO and demanded that the government halt all planes or return planes that had already taken off.[14] At 7:25 p.m., Judge Boasberg published a written order memorializing the TRO.[15]

It was later confirmed that three removal flights departed from Harlingen, Texas during that hearing, around 5:25 p.m., 5:45 p.m., and 7:36 p.m.[16] All three planes were still in the air when the TRO was published, and all three planes arrived in El Salvador the following day. Later that day, Secretary of State Marco Rubio shared a video originally posted by El Salvador’s President Nayib Bukele recording the passengers being led off the plane in handcuffs and taken into a prison.[17] On March 17, 2025, the White House reported that 137 people had been removed from the United States under the AEA, although that figure may now be higher.[18]

The government appealed the district court’s decision, and sought a stay of the TRO.[19] The United States Court of Appeals for the District of Columbia Circuit denied the government’s request,[20] and the government appealed that decision to the U.S. Supreme Court.[21] On April 7, 2025, the Supreme Court published an unsigned order vacating the TRO for improper venue but holding that the government cannot deport individuals without the “notice and opportunity” to challenge their removal in federal court.[22] Specifically, the Court noted that “the Fifth Amendment entitles [noncitizens] to due process of law in the context of removal proceedings,” and that detainees must receive notice that they are subject to removal “within a reasonable time and in such a manner as will allow them to actually seek habeas relief” before the removal.[23] While the Court did not discuss the validity of the Executive Order, it noted that challenges to removal under the AEA must be brought in habeas corpus proceedings in the jurisdiction where the individual is confined.[24] As the plaintiffs in J.G.G. were detained in New York and Texas, the Court found that they had improperly filed in Washington, D.C.[25]

Contempt of Court – J.G.G. v. Trump:

On March 17, 2025, Judge Boasberg held a hearing to investigate whether the Trump Administration was in contempt of the TRO.[26] During the hearing, the government refused to answer any questions, invoking “national security concerns” and arguing that the hearing was an “incursion[] on Executive Branch authority.”[27] Judge Boasberg directed the Department of Justice to certify that no noncitizens were removed after the written order (published at 7:25 p.m. on March 15, 2025), to confirm the exact time the Executive Order was signed, made public, and went into effect, and to provide an estimate of the number of individuals subject to the Executive Order that remain in custody. Weeks of what Judge Boasberg called “increasing obstructionism” followed as the government refused to substantively respond to the information requests.[28] On April 16, 2025, Judge Boasberg determined that the government’s actions “demonstrate a willful disregard” for the TRO, concluding that probable cause existed to find the government in criminal contempt.[29] Even though by that time the Supreme Court had vacated the TRO for a venue defect, Judge Boasberg concluded that “even a legally defective order must be complied with until reversed through the appeals process.”[30]

Habeas Corpus Proceedings: Spotlighting A.A.R.P. and W.M.M. v. Trump:

Following the Supreme Court’s ruling on jurisdiction and venue, several plaintiffs filed habeas petitions in nine federal districts: the Southern District of New York,[31] the District of Rhode Island,[32] the Middle District of Georgia,[33] the Southern District of Texas,[34] the District of Nevada,[35] the Western District of Pennsylvania,[36] the District of Colorado,[37] the District of Columbia,[38] and the Northern District of Texas.[39] One of these cases garnered national attention and eventually resulted in a U.S. Supreme Court decision. On April 16, the ACLU filed a habeas petition on behalf of two named plaintiffs, A.A.R.P. and W.M.M., in the Northern District of Texas, requesting a TRO and class certification for “all noncitizens in custody in the Northern District of Texas who were, are, or will be subject to the [Executive Order].”[40] The district court denied the TRO, stating that the individuals are “not facing such an imminent threat” of removal. That same day, the plaintiffs learned that the detention facility had distributed removal notices to the detainees with warnings that removals were “imminent and will happen tonight or tomorrow.”[41] On April 18, 2025, the plaintiffs filed emergency motions in the district court and Fifth Circuit Court of Appeals, and upon hearing no response, applied to the Supreme Court for an emergency injunction.[42]

Early the following morning, at 12:55 a.m. on April 19, 2025, the Supreme Court issued an unsigned, one-page order temporarily blocking the removal of the class of detainees until further order on the pending injunction motion.[43] Justice Alito (joined by Justice Thomas) published a dissent hours later, calling the Court’s order “unprecedented and legally questionable relief.”[44] The dissent took issue with the timing of the appeal, arguing that without a ruling from the lower courts, and without the opportunity for the government to have been heard, the order was inappropriate.

On May 16, 2025, the Supreme Court granted an injunction pending appeal for the two named plaintiffs and putative class members who “fac[e] an imminent threat of severe, irreparable harm.”[45] The Court first determined that it had jurisdiction—even though the district court had not yet ruled on the plaintiffs’ request for an injunction—because the court’s inaction in the face of evidence that individuals were imminently being removed “had the effect of refusing an injunction.”[46] On the merits, the Court restated its conclusions in J.G.G v. Trump that providing “notice roughly 24 hours before removal, devoid of information about how to exercise due process rights to contest that removal” was not “reasonable” and did not provide “sufficient time and information to reasonably be able to contact counsel, file a petition, and pursue appropriate relief.”[47] The Court did not discuss the underlying legality of the invocation of the AEA, nor did it determine what process would be reasonable to satisfy due process rights; it remanded both questions to the Fifth Circuit, where the matter remains pending.[48]

The Supreme Court’s injunction in A.A.R.P. only binds class members within the Fifth Circuit.[49] As prescribed by the Supreme Court’s May 16 opinion, each lower court is to determine what constitutes “reasonable” and “sufficient” notice ahead of removal.[50] Of the nine cases pending before the federal district courts, eight have granted temporary or preliminary injunctions against the Executive Order as of as of today’s date.[51] With several separate cases pending across nine districts, the legal protections and rights for Venezuelan nationals suspected of being Tren de Aragua members may vary drastically from state to state. The universal result of these pending cases is that the government is required to provide more notice to Venezuelan nationals before removal, but there may be no consistent approach across each district.

Challenge to Removal of Kilmar Armando Abrego Garcia

Kilmar Armando Abrego Garcia is a citizen of El Salvador who had been living in the United States since 2011.[52] In 2019, after the Department of Homeland Security (DHS) initiated removal proceedings against him, an immigration judge granted Mr. Abrego Garcia withholding of removal status, which forbade DHS from removing him to El Salvador due to the threats he faced there from a local gang.[53] On March 12, 2025, however, DHS arrested Mr. Abrego Garcia and, within days, sent him (along with several Venezuelan nationals suspected of being Tren de Aragua members, discussed above) to a maximum security prison in El Salvador known as CECOT, based on his purported membership in the MS-13 gang.[54] Although the government has said in court documents that Mr. Abrego Garcia’s removal was an “administrative error,” it has claimed that Mr. Abrego Garcia’s return to the United States would pose a threat to the public.[55]

On March 24, 2025, Mr. Abrego Garcia, his wife, and his son filed a lawsuit in the United States District Court for the District of Maryland, challenging his removal and seeking an order requiring the government to take steps to return him to the United States. On April 4, 2025, Judge Paula Xinis issued an order finding that Mr. Abrego Garcia had been unlawfully removed to El Salvador in violation of the INA without any legal process and requiring the government to “facilitate and effectuate” his return to the United States.[56] The government asked the United States Court of Appeals for the Fourth Circuit to stay the district court’s decision pending appeal, and the Fourth Circuit denied the government’s motion, writing: “The United States Government has no legal authority to snatch a person who is lawfully present in the United States off the street and remove him from the country without due process.”[57] The government then applied to the United States Supreme Court for a stay, as well as vacatur of the district court’s injunction. After granting a short administrative stay,[58] on April 10, 2025, the Supreme Court voted 9-0 to leave in place the portion of the district court order requiring that the government “facilitate [Mr.] Abrego Garcia’s release from custody in El Salvador and to ensure that his case is handled as it would have been had he not been improperly sent to El Salvador.”[59] The Court ruled, however, that the district court should clarify the portion of its order requiring the government to “effectuate” Mr. Abrego Garcia’s return, as the intended scope of the term was “unclear, and may exceed the [district court’s] authority.”[60] The Court instructed the district court to “clarify its directive, with due regard for the deference owed to the Executive Branch in the conduct of foreign affairs,” while “the Government should be prepared to share what it can concerning the steps it has taken and the prospect of further steps.”[61]

On remand, the district court amended its order, directing the government to “take all available steps to facilitate the return of Mr. Abrego Garcia to the United States as soon as possible,” as well as file a declaration detailing “(1) the current physical location and custodial status of [Mr.] Abrego Garcia; (2) what steps, if any, Defendants have taken to facilitate [Mr.] Abrego Garcia’s immediate return to the United States; and (3) what additional steps Defendants will take, and when, to facilitate his return.”[62] The government asked the Fourth Circuit for another stay pending appeal, which the Fourth Circuit denied as “both extraordinary and premature.”[63] Writing for a unanimous panel, Judge J. Harvey Wilkinson explained:

It is difficult in some cases to get to the very heart of the matter. But in this case, it is not hard at all. The government is asserting a right to stash away residents of this country in foreign prisons without the semblance of due process that is the foundation of our constitutional order. Further, it claims in essence that because it has rid itself of custody that there is nothing that can be done. This should be shocking not only to judges, but to the intuitive sense of liberty that Americans far removed from courthouses still hold dear. . . . The Executive possesses enormous powers to prosecute and to deport, but with powers come restraints. If today the Executive claims the right to deport without due process and in disregard of court orders, what assurance will there be tomorrow that it will not deport American citizens and then disclaim responsibility to bring them home? And what assurance shall there be that the Executive will not train its broad discretionary powers upon its political enemies? The threat, even if not the actuality, would always be present, and the Executive’s obligation to “take Care that the Laws be faithfully executed” would lose its meaning.[64]

Judge Wilkinson rejected the government’s assertion that it only had to work on domestic bars to Mr. Abrego Garcia’s release, pointing to the “Supreme Court’s command that the government facilitate Abrego Garcia’s release from custody in El Salvador.”[65] “Facilitation,” Judge Wilkinson explained, “does not permit the admittedly erroneous deportation of an individual to the one country’s prisons that the withholding order forbids and, further, to do so in disregard of a court order that the government not so subtly spurns.”[66]

Discovery in the case is currently ongoing as the district court continues to attempt to assess what steps the government has taken and will take to comply with the court’s order. On April 22, 2025, the district court criticized the government for failing to satisfy its discovery obligations under the court’s expedited discovery plan.[67] The district court described the government’s objections to various discovery requests as “reflect[ing] a willful and bad faith refusal to comply with discovery obligations.”[68] On May 16, 2025, the district court again criticized the government for failing to comply with the court’s discovery orders.[69] These reprimands have been coupled with indications from the district court that it would entertain sanctions motions from Mr. Abrego Garcia’s lawyers,[70] as well as possibly holding the government in contempt.[71] Though neither sanctions nor contempt have yet been pursued, the district court continues to push the government to meet the expedited discovery deadlines in place. Mr. Abrego Garcia remains in El Salvador.

Challenge to Termination of Temporary Protected Status for Venezuelans

Approximately 350,000 Venezuelans are currently present in the country under the 2023 Temporary Protected Status (TPS) designation for the country.[72] On January 17, 2025, just days before leaving office, President Biden extended the TPS designation through September 2026, allowing those individuals the ability to continue to legally live and work in the country until then. On January 28, 2025, approximately one week into the Trump Administration, DHS advised that they were “reviewing” the TPS designation; on February 5, 2025, they advised that the designation would end on April 7, 2025. This marked the first time in the thirty-five-year history of the TPS statute that an agency has vacated a country’s designation.

On February 19, 2025, the National TPS Alliance and several individual TPS holders filed suit against DHS, challenging the vacatur of the extension of TPS for Venezuela and the subsequent termination of the original extension, alleging violation of the Administrative Procedure Act (APA) and the Fifth Amendment’s Equal Protection Clause.[73] On March 31, 2025, Northern District of California Judge Edward M. Chen granted the plaintiffs’ motion to “postpone the effective date” of the decision to end TPS for Venezuela while the case proceeded through final judgment.[74] The government appealed that decision to the Court of Appeals for the Ninth Circuit, which, on April 18, 2025, denied the emergency motion to stay the district court’s order.[75] The government then requested emergency relief from the U.S. Supreme Court.

On May 19, 2025, the Supreme Court granted the requested emergency stay of the district court’s order to postpone the effective date of the TPS termination for Venezuela. In doing so, protection for those individuals pending the outcome of the underlying litigation has been terminated. The two-paragraph unsigned order has spurred confusion, however, about when and how the loss of lawful status and work authorization will occur, and the order may require further interpretation via lower courts. Further proceedings are ongoing in the district court.

Challenges to Termination of Birthright Citizenship

On the first day of his second term, President Trump issued Executive Order 14160, “Protecting the Meaning and Value of American Citizenship,” declaring that an individual born in the United States is not a citizen if, at the time of their birth, (1) their mother is “unlawfully present” or (2) their mother’s presence is “lawful but temporary,” if in either circumstances their father is not a U.S. citizen or lawful permanent resident.[76] That Executive Order barred federal, state, and local governments from issuing documents purporting to recognize United States Citizenship for an individual in one of those categories, arguing they are not “subject to the jurisdiction” of the United States.[77] The Executive Order has been challenged in numerous jurisdictions on the ground that it violates the Fourteenth Amendment’s guarantee of citizenship to anyone born in the United States.

The Fourteenth Amendment, passed during the Reconstruction era following the end of the Civil War, grants citizenship to “[a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof.” In United States v. Wong Kim Ark, 169 U.S. 649, 693 (1898), the U.S. Supreme Court explained that the Amendment “affirms the ancient and fundamental rule of citizenship by birth within the territory, in the allegiance and under the protection of the country, including all children here born of resident aliens,” with limited exceptions for children of foreign ministers or of hostile occupiers.[78] The Fourteenth Amendment’s citizenship guarantee, the Court explained, “includes the children born within the territory of the United States of all other persons, of whatever race or color, domiciled within the United States.”[79] Since Wong Kim Ark, the Court has repeatedly reaffirmed this view of birthright citizenship. In U.S. ex rel. Hintopoulos v. Shaughnessy, 353 U.S. 72, 73 (1957), the Court recognized that a child born to two individuals present in the U.S. illegally was “an American citizen.” In I.N.S. v. Errico, 385 U.S. 214, 215 (1966), the Court explained that a child born to two individuals who acquired lawful immigration status by fraud still “acquired United States citizenship by birth.” And in I.N.S. v. Rios-Pineda, 471 U.S. 444, 446 (1985), the Court again recognized that a child born to two parents living in the U.S. illegally nonetheless “was a citizen of this country.”

Thus far, three district court judges have barred the federal government from enforcing the Executive Order: Judges John Coughenour of the Western District of Washington,[80] Deborah Boardman of the District of Maryland,[81] and Leo Sorokin of the District of Massachusetts[82] all ruled that the Executive Order violates the Fourteenth Amendment’s guarantee of birthright citizenship. The Ninth Circuit Court of Appeals,[83] Fourth Circuit Court of Appeals,[84] and First Circuit Court of Appeals,[85] respectively, have denied the government’s requests for stays of these district court orders.

On March 13, 2025, the government applied to the U.S. Supreme Court for a stay of the district courts’ injunctions. The orders framed the issue not as one of the Executive Branch’s authority to define citizenship within the boundaries of the Fourteenth Amendment, but instead as one of the district courts’ power to issue nationwide injunctions.[86] In the government’s view, the proper procedure would have been for the plaintiffs in each case to seek class certification and class-wide remedies. Absent the Court reforming nationwide injunction practice, the government argued, the Executive Branch “cannot properly perform its functions.” On April 17, 2025, the Court deferred a decision on the stay application pending oral argument,[87] which occurred on May 15, 2025.[88] The Court has not yet ruled on the stay application, meaning that the Executive Order is still currently on pause.

Challenge to Terminations of the Certain Humanitarian Parole Program

On January 20, 2025, President Trump issued an executive order, titled Securing Our Borders, that directed the Secretary of Homeland Security to “[t]erminate all categorical parole programs that are contrary to the policies of the United States established in [President Trump’s] Executive Orders,” including a Biden-era humanitarian parole program for Cubans, Haitians, Nicaraguans, and Venezuelans known as the CHNV program.[89] In accordance with the Executive Order, on March 25, 2025, DHS published a Federal Register Notice announcing the immediate termination of the CHNV program.[90] The Notice also announced the termination of all paroles under the program effective April 24, 2025 (unless the DHS Secretary makes an individual determination to the contrary), and further directed that parolees without a lawful basis to remain in the United States following the termination of the CHNV program must depart the United States before their parole termination date.

On February 28, 2025, parole beneficiaries and a members alliance filed a putative class action in the District of Massachusetts challenging the end of the CHNV program and other humanitarian parole programs, including Central American Minors Parole, Family Reunification Parole, Military Parole-in-Place, Uniting for Ukraine, and Operation Allies Welcome.[91] The plaintiffs alleged violations of the APA and Due Process violations associated with the parole program revocations, as well as DHS’s later representations that it had suspended processing of applications for other immigration benefit requests filed by certain parolees.

On April 15, 2025, Judge Indira Talwani issued an order staying the Notice insofar as it purported to revoke, without case-by-case review, previously granted parole and work authorizations issued to CHNV parolees prior to the originally stated parole end date.[92] The order further stayed all individualized notices sent to CHNV parolees via their USCIS online account notifying them that their parole was being revoked without case-by-case review. Among other things, Judge Talwani concluded that the plaintiffs were likely to succeed on their claim that the categorical termination of existing grants of parole was arbitrary and capricious. Judge Talwani further concluded that, absent preliminary relief, the plaintiffs would “be forced to choose between two injurious options: continue following the law and leave the country on their own, or await removal proceedings. . . . The first option will expose Plaintiffs to dangers in their native countries and will cause Plaintiffs to forfeit their APA claims. The second option will put Plaintiffs at risk of arrest and detention and, because Plaintiffs will be in the United States without legal status, undermine Plaintiffs’ chances of receiving other forms of immigration relief in the future—potentially permanently.”

The government appealed to the First Circuit Court of Appeals and asked for a stay pending appeal.[93] On May 5, 2025, the First Circuit Court of Appeals denied the government’s emergency motion for a stay.[94] On May 8, 2025, the government asked the U.S. Supreme Court to stay Judge Talwani’s order, and on May 30, 2025, the U.S. Supreme Court granted the stay in a one-paragraph order, with a lengthy dissent from Justice Jackson (joined by Justice Sotomayor).[95] Therefore, as of today’s date, the injunction pausing the mass revocation of CHNV parole has been reversed, and many CHNV parolees’ status has been terminated effective immediately.

Two days before the Supreme Court stayed the April 15 order on CHNV parole, on May 28, 2025, the district court issued its order on other forms of parole, staying the suspension of adjudication of re-parole applications and other immigration benefits for individuals lawfully present under categorical parole programs.[96] This order was not directly impacted by the May 30 Supreme Court order, so for the time being, it remains in effect.

Challenge to Registration Requirements for Certain Noncitizens

On March 12, 2025, DHS announced an interim final rule, effective April 11, 2025, that—for the first time in decades—purports to enforce the registration requirements of the Immigration and Nationality Act (INA) against certain noncitizens. These requirements include submitting a newly available registration form online and undergoing biometrics screening.[97] Noncitizens who follow such registration requirements will be issued a certificate or receipt card that they must carry with them at all times.[98]

On March 31, 2025, four organizations—Coalition for Humane Immigrant Rights (a California-based nonprofit that provides services to immigrant communities), United Farmworkers of America (an organization that focuses on improving the lives of agricultural workers), CASA, Inc. (a nonprofit that works to improve the quality of life in working-class diverse and immigrant communities), and Make the Road New York (a nonprofit that works to improve the lives of low-income New Yorkers)—filed suit in the United States District Court for the District of Columbia and moved for a stay of the effective date of the rule (or, in the alternative, for a preliminary injunction) and to enjoin the government from implementing or enforcing the rule for the pendency of the litigation.[99] Among other things, the plaintiffs argued that the rule violated the APA for failing to follow its notice and comment procedures and for being arbitrary and capricious.[100]

On April 10, 2025, Judge Trevor N. McFadden denied the plaintiffs’ motion on the basis that they had “failed to show that they have a substantial likelihood of standing.”[101] Judge McFadden concluded that the plaintiff organizations’ harms were “too speculative,” and they failed to show that the rule would “erode their core missions.” As a result, on April 11, 2025, the rule went into effect, meaning that certain noncitizens, namely those who have not applied for a visa, submitted one of several specific forms for immigration relief, or been issued one of several types of identity, visa, entry, or lawful status documents,[102] are required to register.[103] Noncitizens who are required to register but willfully fail to do so (or to provide proof of registration when requested by law enforcement) could face civil and criminal penalties including a fine of up to $5,000 or imprisonment for up to six months, or both.[104] On April 24, 2025, the plaintiffs appealed the district court’s decision to the District of Columbia Circuit Court[105] and moved the District Court for an injunction pending appeal.[106] Both the appeal and the motion are currently pending, meaning the registration requirement remains in effect as of today.

Challenges to Revocation of Certain Student Visas

Foreign Student Visas and the Student Exchange Visitor System (SEVIS)

Foreign students can study in the United States by applying for one of three types of visas. An F-1 visa is the most used, allowing students to attend an academic institution like a university; an M-1 visa allows students to join a vocational program; and a J-1 visa allows students to enter into an “exchange” program with a cultural component. Immigration and Customs Enforcement (ICE), as well as other agencies, use the Student and Exchange Visitor Program (SEVP) to monitor student status and compliance with their visas via the Student Exchange Visitor Information System (SEVIS).

The State Department may revoke visas for a number of reasons, ranging from violations of their status, criminal offenses, failure to register change of address, falsification of documents, engagement in any activity related to espionage, endangerment of public safety or national security, participation in an activity related to the opposition to or overthrow of the U.S. Government, or where their presence has potential adverse foreign policy consequences for the U.S. Government.[107] The State Department has clarified that a visa may be revoked even without a formal criminal charge, and all that is required is “derogatory information directly from another U.S. Government agency, including a member of the intelligence or law enforcement community.”[108] If a student violates a term of their student visa, they are ineligible to return to the United States for five years after the date of their violation.[109]

Beginning in March 2025, thousands of international students and recent graduates were advised that their SEVIS records had been terminated, that their underlying visas had been revoked, or both. DHS officials have stated that this was done as part of a “Student Criminal Alien Initiative” targeting students who had had any form of interaction with some form of law enforcement, whether or not it resulted in a criminal conviction that qualified for visa revocation under the law (or any criminal conviction at all).[110]

Doe v. Trump[111]

Following the Student Criminal Alien Initiative, at least 65 lawsuits were filed on behalf of at least 300 students whose SEVIS records and/or visas were terminated. One such group of consolidated cases, titled Doe v. Trump under the lead case, was filed by a group of student-plaintiffs in the Northern District of California on April 7, 2025, alleging that their SEVIS records and/or student visas were terminated in violation of the APA and requesting a TRO.[112] On April 25, 2025, the court held a hearing on the TRO requests and granted (or extended) them in each of the consolidated cases. On May 14, 2025, the court held a hearing on motions for preliminary injunctions, during which counsel for ICE advised that they would be restoring SEVIS records retroactively and contacting every individual impacted by mass terminations.

On May 22, 2025, Judge Jeffrey S. White issued a nationwide preliminary injunction prohibiting the arrest, incarceration, or “impositi[on of] any adverse legal effect” on individuals similarly situated to the plaintiffs pending the final resolution of the matter.[113] In his order, Judge White noted that the plaintiffs were likely to succeed on their APA claim that the “decision to terminate their SEVIS records was arbitrary and capricious because the decision was not based on a rational connection between the facts found and the choice made,” and that the “overwhelming majority of courts considering these cases have determined the plaintiffs are likely to succeed on the merits of the same claims presented here.”[114] Currently, therefore, international students whose SEVIS records were terminated or visas revoked via the mass Student Criminal Alien Initiative should have those terminations reversed and visas reinstated, permitting their continued lawful presence in the country for the pendency of their studies.

Challenges to Executive Actions Withholding Funding for Immigration-Related Services

The Trump Administration has suspended or entirely terminated funding for various grants and programming, including programs that assist noncitizens navigating the immigration legal system. Gibson Dunn is counsel in three of these cases, summarized below.

Amica Center for Immigrant Rights, et al. v. U.S. Department of Justice[115]

For more than two decades, Congress has appropriated funding for the Department of Justice specifically to spend on providing basic legal orientation programs (including a flagship Legal Orientation Program, or “LOP”) to educate noncitizens about legal rights and responsibilities in immigration detention facilities and immigration courts. These programs are often the only source of reliable legal information for many noncitizens, and the lawyers that run these programs are often the only non-government lawyers regularly inside immigration detention facilities. In January 2025, the Trump Administration issued a “stop work order” for these programs. On January 31, 2025, represented by Gibson Dunn, non-profit legal service providers that run these programs with government funding filed suit in the U.S. District Court for the District of Columbia to prevent the government from eliminating the programs. The suit brings claims under the APA and constitutional claims. Just days after the legal service providers filed their complaint, the government rescinded its stop work order. But on April 16, 2025, the government again stopped all funding for the legal orientation programs. The legal service providers moved for summary judgment, and Judge Randolph Moss ordered the government to supplement the administrative record in response to the government’s contention that it was going to “federalize” the programs. The programs are not currently being funded while the case is ongoing.

United States Conference of Catholic Bishops v. U.S. Department of State[116]

The United States has provided resettlement assistance for newly admitted refugees since 1980 under the Refugee Act and a series of appropriations bills. But on January 24, 2025, citing two Executive Orders, the State Department ended its relationships with private resettlement agencies and suspended resettlement assistance for refugees already in the country. The United States Conference of Catholic Bishops (USCCB) is one of the affected resettlement partners, and has long been providing services to refugees in the United States. The initial-resettlement services mandated by the Refugee Act for refugees in their first 90 days include food, housing, job training, English education, and other services aimed at successful integration into the United States and material support during the transition. At the time of the suspension, USCCB had nearly 7,000 refugees in their initial-resettlement period in its care, all assigned to the Conference by the federal government. On February 26, and after USCCB (represented by Gibson Dunn) filed suit, the State Department terminated its cooperative agreements with the USCCB, stating that the agreements “no longer effectuate[] agency priorities.” USCCB and its partner organizations were forced to rely on their own resources to serve the refugees in their care, lay off staff, and cut back on services provided. In its lawsuit in the U.S. District Court for the District of Columbia, USCCB brings claims under the Constitution, the Refugee Act, the Impoundment Control Act, the APA, and State Department regulations. USCCB is asking the Court to set aside the suspension and termination of its relationship with the United States and enter an injunction requiring the United States to provide the assistance mandated by Congress for newly admitted refugees.

Community Legal Services in East Palo Alto, et al. v. U.S. Department of Health & Human Services[117]

For more than a decade, the Department of Health & Human Services (HHS) has paid legal service providers to provide legal representation to unaccompanied children—children who arrive in the United States without a parent or legal guardian, and who may be as young as just a few months old. HHS provided this funding to comply with a command from Congress in the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008, which orders HHS to fund legal representation for unaccompanied children to the extent it has funding available to do so. In March 2025, HHS cut all funding for this representation. Represented by Gibson Dunn, non-profit legal service providers quickly filed suit and sought a TRO. Judge Araceli Martinez-Olguin of the U.S. District Court for the Northern District of California issued a TRO commanding the government to continue funding legal representations for unaccompanied children. The government appealed the TRO and the Ninth Circuit dismissed the appeal. Judge Martinez-Olguin then issued a preliminary injunction, commanding the government to continue funding the legal representations through the resolution of the case. The government has appealed that order, and the appeal is pending in the Ninth Circuit. The Ninth Circuit has rejected the government’s request to stay the preliminary injunction pending the appeal, meaning that the preliminary injunction requiring HHS’s compliance with Congress’s mandate to fund representation for unaccompanied children remains in effect.

[1] “Invocation of the Alien Enemies Act Regarding the Invasion of The United States by Tren De Aragua,” The White House (Mar. 15, 2025), https://www.whitehouse.gov/presidential-actions/2025/03/invocation-of-the-alien-enemies-act-regarding-the-invasion-of-the-united-states-by-tren-de-aragua/. While the Executive Order was issued and signed on March 14, 2025, it was not published online until March 15, 2025.

[2] Id.

[3] 50 U.S.C. § 21.

[4] Id. §§ 21, 22.

[5] Jennifer Elsea, Cong. Rsch. Serv., LSB 11269, The Alien Enemy Act: History and Potential Use to Remove Members of International Criminal Cartels 3 (Apr. 2, 2025).

[6] Id. See also Amended Class Action Petition for Writ of Habeas Corpus and Complaint, J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 1270187 (D.D.C. Apr. 24, 2025).

[7] Elsea, supra note 5.

[8] Trump v. J.G.G., 145 S.Ct. 1003 (2025).

[9] Complaint and Petition for Writ of Habeas Corpus, J.G.G. v. Trump, 2025 WL 836447 (D.D.C. Mar. 15, 2025).

[10] Transcript of Proceedings before Chief Judge James E. Boasberg at 11, J.G.G. v. Trump, No. 1:25CV00766, (D.D.C. Mar. 15, 2025).

[11] Id. at 15.

[12] Id.

[13] Id. at 41–43.

[14] Id. at 43.

[15] Minute Order on Motion for Temporary Restraining Order, J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 825116 (D.D.C. Mar. 15, 2025); see also Transcript of Proceedings before Chief Judge James E. Boasberg, J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 829734 (D.D.C. Mar. 15, 2025).

[16]Luke Broadwater, et al., A Judge Ordered Deportation Planes to Turn Around. The White House Didn’t Listen, NYTimes (Apr. 8, 2025), available at https://www.nytimes.com/2025/03/17/us/politics/timeline-trump-deportation-flights-el-salvador.html.

[17] Id.

[18] US/El Salvador: Venezuelan Deportees Forcibly Disappeared, Human Rights Watch (Apr. 11, 2025), available at https://www.hrw.org/news/2025/04/11/us/el-salvador-venezuelan-deportees-forcibly-disappeared.

[19] Application to Vacate the Orders Issued by the United States District Court for the District of Columbia and Request for an Immediate Administrative Stay, J.G.G. v. Trump, No. 25-5067, 2025 WL 914682 (D.C. Cir. Mar. 26, 2025).

[20] Id.

[21] Application to Vacate the Orders Issued by the United States District Court for the District of Columbia and Request for an Immediate Administrative Stay, Trump v. J.G.G., No. 24A, 2025 WL 962719 (March 2025)

[22] Trump v. J.G.G., 145 S.Ct. 1003 (Apr. 7, 2025).

[23] Id. at 1006.

[24] Id.

[25] Id.

[26] Transcript of Proceedings before Chief Judge James E. Boasberg, J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 829734 (D.D.C. Mar. 17, 2025).

[27] Id.

[28] Memorandum Opinion regarding Probable Cause Order, J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 1119481 (D.D.C. Apr. 16, 2025).

[29] Id. at *7.

[30] Id.

[31] G.F.F. v. Trump, No. 25 Civ. 2886 (AKH), 2025 WL 1166911 (S.D.N.Y. Apr. 11, 2025).

[32] G.M.G. v. Trump, 1:25-CV-00195 (D.R.I. May 5, 2025).

[33] Y.A.P.A. v. Trump, 4:25-CV-00144 (M.D. Ga. Apr. 30, 2025).

[34] J.A.V. v. Trump, No. 1:25-CV-072, 2025 WL 1064009 (S.D. Tex. Apr. 9, 2025).

[35] Viloria Aviles v. Trump, 2:25CV00611 (D. Nev. Apr. 3, 2025).

[36] A.S.R. v. Trump, No. 3:25-cv-00113-SLH, 2025 WL 1122485 (W.D. Pa. Apr. 15, 2025).

[37] D.B.U. v. Trump, No. 1:25-cv-01163-CNS, 2025 WL 1106556 (D. Colo. Apr. 14, 2025).

[38] J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 1352316 (D.D.C. Apr. 24, 2025).

[39] A.A.R.P. v. Trump, No. 1:25-cv-00059, 2025 WL 1148140 (N.D. Tex Apr. 27, 2025).

[40] Complaint – Class Action: Class Petition for Writ of Habeas Corpus and Complaint for Declaratory and Injunctive Relief, A.A.R.P. v. Trump, No. 1:25-cv-00059, E.C.F. No. 1 (N.D. Tex Apr. 16, 2025).

[41] Petitioners-Plaintiffs’ Renewed Emergency Application for Temporary Restraining Order, A.A.R.P. v. Trump, No. 1:25-cv-00059, E.C.F. No. 30 (N.D. Tex. Apr. 18, 2025).

[42] Emergency Application for an Emergency Injunction or Writ of Mandamus, Stay of Removal, and Request for an Immediate Administrative Injunction, A.A.R.P. v. Trump, No. 24A1007, 2025 WL 1171734 (S. Ct. Apr. 19, 2025).

[43] A.A.R.P. v. Trump, No. 24A1007, 145 S. Ct. 1034 (Mem) (S. Ct. Apr. 19, 2025).

[44] Id. at 1036 (Alito, J., dissenting).

[45] A.A.R.P. v. Trump, Nos. 24A1007, 24-1177, 2025 WL 1417281, at *2 (S. Ct. May 16, 2025).

[46] Id. at *3.

[47] Id. at *2.

[48] Id. at *4.

[49] Id.

[50] Id. at *2.

[51] One case is still pending in the District of Columbia District Court. See J.G.G. v. Trump, No. 1:25CV00766, 2025 WL 1349496 (D.D.C. May 8, 2025).

[52] See Abrego Garcia v. Noem, 2025 WL 1014261, at *2 (D. Md. Apr. 6, 2025).

[53] See id.

[54] Id. at *3.

[55] Application to Vacate the Injunction Issued by the United States District Court for the District of Maryland and Request for an Immediate Administrative Stay, Noem v. Abrego Garcia, No. 24A949, 2025 WL 1038907 (U.S. April 1, 2025).

[56] Abrego Garcia v. Noem, 2025 WL 1024654, at *1 (D. Md. Apr. 4, 2025), amended, 2025 WL 1085601 (D. Md. Apr. 10, 2025).

[57] See Abrego Garcia v. Noem, 2025 WL 1021113 (4th Cir. Apr. 7, 2025).

[58] Noem v. Abrego Garcia, 2025 WL 1022673 (U.S. Apr. 7, 2025), vacated, 2025 WL 1077101 (U.S. Apr. 10, 2025).

[59] Noem v. Abrego Garcia, 145 S.Ct. 1017, 1018 (2025) (internal quotation marks omitted).

[60] Id.

[61] Id.

[62] Abrego Garcia v. Noem, 2025 WL 1085601, at *1 (D. Md. Apr. 10, 2025).

[63] Abrego Garcia v. Noem, 2025 WL 1135112, at *1 (4th Cir. Apr. 17, 2025).

[64] Id. at *1-2.

[65] Id.

[66] Id. at 2.

[67] Devan Cole, ‘That ends now’: Judge overseeing Abrego Garcia case knocks Trump administration for repeated stonewalling, CNN (Apr. 22, 2025); available at https://www.cnn.com/2025/04/22/politics/abrego-garcia-judge-xinis-justice-that-ends-now.

[68] Abrego Garcia v. Noem, 2025 WL 1166402, at *1 (D. Md. Apr. 22, 2025).

[69] See Alan Feuer and Aishvarya Kavi, U.S. Takes Defiant Stance in Court, Saying Abrego Garcia Deportation Was Lawful, N.Y. Times (May 16, 2025); available at https://www.nytimes.com/2025/05/16/us/politics/doj-trump-deportation-abrego-garcia.html.

[70] Gary Grumbach and Dareh Gregorian, Judge in Abrego Garcia case indicates she’s weighing contempt proceedings against Trump administration, NBC News (Apr. 15, 2025), available at https://www.nbcnews.com/politics/immigration/judge-abrego-garcia-case-indicates-weighing-contempt-proceedings-trump-rcna201359.

[71]Sareen Habeshian, Judge in deportation case threatens Trump admin with contempt of court, Axios (Apr. 16, 2025), available at https://www.axios.com/2025/04/15/kilmar-abrego-garcia-deported-case-return.

[72] TPS is a program established by Congress to protect individuals who cannot safely return to their home country due to war, natural disaster, or another emergency. For further discussion of TPS, including the 2021 and 2023 designations for Venezuela, see Gibson Dunn’s Immigration Task Force Client Alert: Updates to Humanitarian Parole and Temporary Protected Status, dated February 24, 2025, available at https://www.gibsondunn.com/updates-to-humanitarian-parole-and-temporary-protected-status/.

[73] Complaint, National TPS Alliance v. Noem, 3:25-cv-01766, ECF No. 1 (N.D. Cal. Mar. 31, 2025).

[74] National TPS Alliance v. Noem, 3:25-cv-01766, ECF No. 93 (N.D. Cal. Mar. 31, 2025).

[75] National TPS Alliance, et al. v. Noem, et al., 25-2120, ECF No. 21 (9th Cir. Apr. 18, 2025).

[76] Exec. Order No. 14160, “Protecting the Meaning and Value of American Citizenship” (Jan. 20, 2025).

[77] Id. § 2(a); see also Gibson Dunn’s Immigration Task Force Client Alert, Jan. 27, 2025, available at https://www.gibsondunn.com/gibson-dunn-launches-immigration-task-force/.

[78] 168 U.S. 649, 693 (1898).

[79] Id.

[80] Washington v. Trump, 2025 WL 272198 (W.D. Wash. Jan. 23, 2025).

[81] CASA, Inc. v. Trump, 2025 WL 408636 (D. Md. Feb. 5, 2025).

[82] New Jersey v. Trump, 2025 WL 617583 (D. Mass. Feb. 26, 2025).

[83] Washington v. Trump, 2025 WL 553485 (9th Cir. Feb. 19, 2025).

[84] CASA, Inc. v. Trump, 2025 WL 654902 (4th Cir. Feb. 28, 2025).

[85] New Jersey v. Trump, 131 F.4th 27 (1st Cir. 2025).

[86] Application for a Partial Stay of the Injunction, Trump v. CASA, Inc., 2025 WL 817770 (U.S. Mar. 13, 2025).

[87] Trump v. CASA, Inc., 2025 WL 1132004 (U.S. Apr. 17, 2025).

[88] Transcript of Oral Argument, Trump v. CASA, Inc., 2025 WL 1424657 (U.S. May 15, 2025).

[89] Exec. Order No. 14165, 90 F.R. 8467, § 7(b) (Jan. 20, 2025), available at https://www.federalregister.gov/documents/2025/01/30/2025-02015/securing-our-borders.

[90] Department of Homeland Security, Termination of Parole Processes for Cubans, Haitians, Nicaraguans, and Venezuelans, 90 Fed. Reg. 13611 (Mar. 25, 2025), available at https://www.federalregister.gov/documents/2025/03/25/2025-05128/termination-of-parole-processes-for-cubans-haitians-nicaraguans-and-venezuelans (last visited May 30, 2025).

[91] Doe v. Noem, No. 1:25-cv-10495 (D. Mass.).

[92] Memorandum & Order Granting in Part Plaintiffs’ Emergency Motion for a Stay of DHS’sS En Masse Truncation of All Valid Grants of CHNV Parole, Doe v. Noem et al., No. 1:25-cv-10495-IT (D. Mass. Apr. 14, 2025), ECF No. 97.

[93] Doe v. Noem, et al., No. 1:25-cv-1384 (1st Cir. May 5, 2025).

[94] Id.

[95] Noem v. Doe, et al., 2025 WL 1534782 (S. Ct. May 30, 2025).

[96] Memorandum & Order Granting Partial Relief on Plaintiffs’ Motion for Preliminary Injunction and Stay of Administrative Action, Doe v. Noem et al., 2025 WL 1514420 (D. Mass. May 28, 2025).

[97] See Alien Registration Form and Evidence of Registration, 90 Fed. Reg. 11793 (Mar. 12, 2025).

[98] Id.

[99] See Compl., Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Mar. 31, 2025); Br. for Pls., Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Mar. 31, 2025).

[100] See Br. for Pls. at 10–28, Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Mar. 31, 2025).

[101] See Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., 2025 WL 1078776, at *1 (D.D.C. Apr. 10, 2025). On April 24, 2025, the plaintiffs filed their notice that they intended to appeal the District Court’s denial of their injunction motion. Notice of Appeal, Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Apr. 24, 2025).

[102] See Alien Registration Requirement, U.S. Citizenship and Immigr. Servs, available at https://www.uscis.gov/alienregistration (last visited May 30, 2025).

[103] Many noncitizens are considered to have already registered. See Gibson Dunn’s Immigration Task Force Client Alert: Agency Action Update, Mar. 21, 2025, available at https://www.gibsondunn.com/immigration-task-force-agency-action-update/.

[104] See Alien Registration Requirement, U.S. Citizenship and Immigr. Servs., available at https://www.uscis.gov/alienregistration (last visited May 30, 2025) (“It is the legal obligation of all unregistered aliens (or previously registered aliens who turn 14 years old) who are in the United States for 30 days or longer to comply with these requirements. Failure to comply may result in criminal and civil penalties, up to and including misdemeanor prosecution, the imposition of fines, and incarceration.”); Alien Registration Form and Evidence of Registration, 90 Fed. Reg. 11793, 11794 (Mar. 12, 2025) (“An alien’s willful failure or refusal to apply to register or to be fingerprinted is punishable by a fine of up to $5,000 or imprisonment for up to six months, or both.”).

[105] See Notice of Appeal from Denial of Preliminary Injunction, Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Apr. 24, 2025).

[106] See Pls.’ Mot. for Injunction Pending Appeal and Incorporated Mem. of Law, Coal. for Humane Immigrant Rts. v. U.S. Dep’t of Homeland Sec., No. 25 Civ. 943 (D.D.C. Apr. 24, 2025).

[107] 8 U.S.C. § 1127 (2025).

[108] Foreign Affs. Manual, U.S. Dep’t of State 9 FAM 403.11-5(B) (2024), available at https://fam.state.gov/fam/09FAM/09FAM040311.html#M403_11_5_B.

[109] 8 U.S.C. § 1182 (a)(6)(G) (2025).

[110] See, e.g., Vyas v. Noem, No. 3:25-cv-0261-RCC, 2025 WL 1351537, at *4 (S.D. W. Va. May 8, 2025).

[111] No. 4:25-cv-03140 (N.D. Cal.).

[112] Doe v. Trump was filed on behalf of a single student-plaintiff; the case was consolidated with various other cases brought on behalf of additional student-plaintiffs pending in the same district including S.Y. v. Noem, Chen v. Noem, Kim v. Noem, W.B. v. Noem, and Bai v. Noem.

[113] Ord. Granting Mots. Preliminary Injunction, No. 4:25-cv-03244-JSW, Doc. 50 at 20 (N.D. Cal. May 22, 2025).

[114] Id. at 19.

[115] No. 1:25-CV-00298 (D.D.C.).

[116] No. 1:25-cv-00465 (D.D.C.).

[117] No. 3:25-CV-02847 (N.D. Cal.).

The following Gibson Dunn lawyers prepared this update: Matt Rozen, Laura Raposo, Ariana Sañudo, Kayla Jahangiri, Zachary Goldstein, Arthur Halliday, Aly Cox, Shri Dayanandan, Carolyn Ye, and Matt Weiner.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, any leader or member of the firm’s Pro Bono, Public Policy, Administrative Law & Regulatory, Appellate & Constitutional Law, or Labor & Employment practice groups, or the following members of the firm’s Immigration Task Force:

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)

Naima L. Farrell – Partner, Labor & Employment Practice Group,
Washington, D.C. (+1 202.887.3559, nfarrell@gibsondunn.com)

Nancy Hart – Partner, Litigation Practice Group,
New York (+1 212.351.3897, nhart@gibsondunn.com)

Katie Marquart – Partner & Chair, Pro Bono Practice Group,
Los Angeles (+1 213.229.7475, kmarquart@gibsondunn.com)

Laura Raposo – Associate General Counsel,
New York (+1 212.351.5341, lraposo@gibsondunn.com)

Matthew S. Rozen – Partner, Appellate & Constitutional Law Practice Group,
Washington, D.C. (+1 202.887.3596, mrozen@gibsondunn.com)

Ariana Sañudo – Associate, Pro Bono Practice Group,
Los Angeles (+1 213.229.7137, asanudo@gibsondunn.com)

Betty X. Yang – Partner & Co-Chair, Trials Practice Group,
Dallas (+1 214.698.3226, byang@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC added 43 unregistered foreign entities to its Red List.

New Developments

CFTC Adds 43 Unregistered Foreign Entities to RED List. On May 29, as part of the CFTC’s ongoing efforts to help protect Americans from fraud, the CFTC added 43 unregistered foreign entities to its Red List, a tool that provides information to U.S. market participants about foreign entities that are acting in an unregistered capacity and to help them make more informed decisions about trading. The Red List, which stands for Registration Deficient List, launched in 2015, and now contains almost 300 entities. [NEW]
CFTC Awards Approximately $700,000 to Whistleblower. On May 29, the CFTC announced a whistleblower award of approximately $700,000. The whistleblower information prompted the CFTC to open the investigation and described the misconduct that ultimately appeared in the order. The whistleblower also provided substantial assistance and helped the Commission conserve resources during the investigation. [NEW]
SEC Publishes Data on Regulation A, Crowdfunding Offerings, and Private Fund Beneficial Ownership Concentration. On May 28, the SEC published three new reports that provide the public with information on capital formation and beneficial ownership of qualifying private funds. The first two papers—analyses of the Regulations A and Crowdfunding markets—provide valuable information on how capital is being raised in the United States particularly by smaller issuers. The third paper on Qualifying Hedge Funds provides information on the interaction of beneficial ownership concentration, portfolio liquidity, investor liquidity, fund leverage, performance, and margins. [NEW]
CFTC Staff Issues Advisory on Market Volatility Controls. On May 22, the CFTC issued a staff advisory reminding designated contract markets and derivatives clearing organizations of certain core principles and regulatory obligations under the Commodity Exchange Act and CFTC regulations related to controls designed to address market volatility.
Commissioner Kristin N. Johnson Makes Statement on Departure from CFTC. On May 21, Commissioner Kristin N. Johnson announced that she intends to step down from the Commission later this year.
CFTC Staff Issues Interpretation Regarding Certain Cross-Border Definitions. On May 21, the CFTC issued an interpretative letter confirming the application of certain cross-border definitions to Susquehanna Crypto, a proprietary trading firm organized in a foreign jurisdiction. Specifically, the interpretative letter confirms that the proprietary trading firm is not a “person located in the United States” for purposes of the “foreign futures or foreign options customer” definition in Commission regulation 30.1(c); is not a “participant located in the United States” for purposes of Commission regulation 48.2(c); is a “foreign located person” for purposes of Commission regulation 3.10(c)(1)(ii); and is not a “U.S. person” as defined by Commission regulation 23.23(a) and the Commission’s 2013 Interpretive Guidance and Policy Statement Regarding Compliance With Certain Swap Regulations.
CFTC Releases Procedures on Registered Non-U.S. Swap Entities Using Substituted Compliance. On May 20, the CFTC released procedures regarding CFTC-registered non-U.S. swap dealers or major swap participants relying on substituted compliance. The procedures establish how CFTC Divisions will address potential non-compliance with foreign law that has been found by the CFTC to be comparable in outcome to the Commodity Exchange Act or CFTC regulations pursuant to a substituted compliance order.
SEC Names Katherine Reilly as Acting Inspector General. On May 19, the SEC announced the appointment of Katherine Reilly as the agency’s Acting Inspector General. Ms. Reilly is currently serving as a Deputy Inspector General at the SEC. She replaces Deborah Jeffrey, who has served as the SEC’s Inspector General since 2023 and is retiring.
SEC’s Division of Trading and Markets Releases FAQ Relating to Crypto Asset Activities and Distributed Ledger Technology. On May 15, the SEC prepared responses to frequently asked questions relating to crypto asset activities and distributed ledger technology. The responses cover topics relating to broker-dealer financial responsibility and transfer agents. These responses represent the views of the staff of the Division of Trading and Markets. They are not a rule, regulation, or statement of the SEC.
Commissioner Christy Goldsmith Romero Makes Statement on Departure from CFTC. On May 16, Commissioner Christy Goldsmith Romero announced that she intends to step down from the Commission and retire from federal service. Her final day at the Commission will be May 31.
Commissioner Summer K. Mersinger Makes Statement on Departure from CFTC. On May 14, Commissioner Mersinger announced that she intends to step down from her position as Commissioner at the CFTC at the end of the month, to pursue new opportunities.
CFTC Warns Public of Imposter Scam Targeting Fraud Victims. On May 14, the CFTC warned the public about a growing imposter scam involving individuals falsely claiming to represent the agency. According to the CFTC, scammers are contacting members of the public and claiming to represent the CFTC Office of Inspector General and promise to help financial fraud victims recover lost funds from foreign bank accounts. The CFTC Office of Inspector General stated that it will never contact individuals with offers to recover money lost to investment scams.
Acting Chairman Pham Makes Statement on Court Sanctions Against CFTC. On May 13, CFTC Acting Chairman Caroline D. Pham made a statement regarding the Federal District Court report and recommendations for sanctions against the CFTC for misconduct in CFTC v. Traders Global Group Inc, highlighting proactive efforts to overhaul the CFTC’s Division of Enforcement and reform culture and conduct, develop staff, and leverage expertise and reduce siloing.

New Developments Outside the U.S.

ESMA Urges Social Media Companies to Tackle Unauthorized Financial Ads. On May 28, ESMA wrote to several social media and platform companies encouraging them to take proactive steps to prevent the promotion of unauthorized financial services. This approach complements last week’s initiative launched by IOSCO, highlighting the global nature of doing online harm linked to financial misconduct. [NEW]
ESMA Renews the Mandate of the Chair and the Two Independent Members of the CCP Supervisory Committee. On May 28, ESMA renewed the mandates of Klaus Löber as Chair of the Central Counterparties (“CCP”) Supervisory Committee and Nicoletta Giusto and Froukelien Wendt as Independent Members. The renewed mandates will be effective as of December 1, 2025 for a 5-year period. [NEW]
ESMA Asks for Input on the Retail Investor Journey as Part of Simplification and Burden Reduction Efforts. On May 21, ESMA launched a Call for Evidence (“CfE”) on the retail investor journey under the Markets in Financial Instruments Directive 2014. The purpose of this CfE is to gather feedback from stakeholders to better understand how retail investors engage with investment services, and whether regulatory or non-regulatory barriers may be discouraging participation in capital markets.

New Industry-Led Developments

ISDA Provides Guidance for EU Model Application for ISDA SIMM®. On May 29, ISDA provided guidance to ISDA Standard Initial Margin Model (“SIMM”) users to promote awareness and facilitate a consistent approach to preparing data for the initial application. ISDA SIMM v2.7+2412 goes into effect on July 12, 2025, triggering the initial application requirement for its continued use by all financial and non-financial EU counterparties exchanging IM calculated using ISDA SIMM®. [NEW]
ISDA Publishes SwapsInfo for First Quarter of 2025. On May 27, ISDA published its SwapsInfo Quarterly Review. The review noted that interest rate derivatives trading activity increased in the first quarter of 2025, driven by elevated interest rate volatility, shifting central bank policy expectations and evolving inflation and growth outlooks. Trading in index credit derivatives also rose, as market participants responded to a changing macroeconomic environment and sought to manage credit exposure. [NEW]
IOSCO Issues Final Report on Updated Liquidity Risk Management Recommendations for Collective Investment Schemes. On May 26, IOSCO published its Final Report on Revised Recommendations for Liquidity Risk Management for Collective Investment Schemes (“CIS”), alongside its Implementation Guidance. The Final Report includes 17 recommendations across six sections: CIS Design Process, Liquidity Management Tools and Measures, Day-to-Day Liquidity Management Practices, Stress Testing, Governance and Disclosures to Investors and Authorities. [NEW]
ISDA Publishes ISDA SIMM® Methodology, Version 2.7+2412. On May 22, ISDA published updates to its SIMM methodology that are based on the full recalibration of the model and marked the first SIMM version publication of the new semiannual calibration cycle in 2025. The effective date of July 12, 2025 means that ISDA SIMM users should use SIMM version 2.7+2412 to calculate the initial margin for close of business on Friday, July 11, 2025 onwards. This means that the first day for exchange of initial margin calculated using SIMM version 2.7+2412 would be on Monday, July 14, 2025.
ISDA/SIFMA/SIFMA AMG Publish Joint Response to CFTC Request for Comment on 24-7 Trading. On May 21, ISDA, the Securities Industry and Financial Markets Association (“SIFMA”), and the SIFMA Asset Management Group (“SIFMA AMG”) jointly filed a comment letter in response to the CFTC’s request for comment on 24/7 trading and clearing. ISDA, SIFMA, and SIFMA AMG believe that the feasibility of both 24/7 trading and clearing needs to be evaluated holistically with an understanding of the interdependencies between market participants, trading venues, middleware and software providers, clearing systems, margining frameworks, payments systems, default mechanisms and adjacent markets.
IOSCO Makes Statement on Combatting Online Harm and the Role of Platform Providers. On May 21, IOSCO reiterated its concern about risks associated with investment fraud orchestrated through online paid-for advertisements and user-generated content. IOSCO stated that regulators and platforms providers are strategically positioned to mitigate the potential investor harm arising from these risks and asks platform providers to enhance efforts, consistent with local law, aimed at reducing risk of pecuniary harm to investors, which also threatens public trust in the services provided by platform providers.
IOSCO Releases Sustainable Bonds Report. On May 21, IOSCO published its Sustainable Bonds Report which identifies the key characteristics and trends tied to the sustainable bond market. IOSCO’s Report includes five key considerations which are designed to address market challenges, including enhancing investor protection, ensuring sustainable bond markets are operating in a fair and efficient way, and improving accessibility.
IOSCO Publishes Final Reports on Finfluencers, Online Imitative Trading Practices and Digital Engagement Practices. On May 19, IOSCO published the Final Reports on Finfluencers, Online Imitative Trading Practices and Digital Engagement Practices, as part of the third wave of its Roadmap for Retail Investor Online Safety. The Finfluencers Final Report explores the evolving landscape of finfluencers, the associated potential benefits and risks, and the current regulatory responses across jurisdictions.
IOSCO Concludes its 50th Annual Meeting. On May 15, IOSCO concluded its 50th Annual Meeting, which was hosted by the Qatar Financial Markets Authority (“QFMA”) in Doha. IOSCO welcomed near 500 participants over the course of three days, followed by the QFMA public conference. The IOSCO Annual Meeting brings all 130 member jurisdictions together to discuss the most relevant issues and risks with regard to global financial markets, and how to assist regulators in implementing standards through capacity building.
ISDA Publishes Paper Exploring Use of Generative AI to Extract and Digitize CSA Clauses. On May 15, ISDA published a whitepaper that shows generative artificial intelligence can be used to accurately and reliably extract, interpret and digitize key legal clauses from ISDA’s credit support annexes, showing how this technology could increase efficiency, cut costs and reduce risks in derivatives processes that have traditionally been highly manual and resource intensive.
ISDA Margin Survey Shows Leading Derivatives Firms Collected $1.5 Trillion of Margin at Year-end 2024. On May 14, ISDA published its latest annual margin survey, which shows that initial margin (“IM”) and variation margin collected by leading derivatives market participants for their non-cleared derivatives exposures increased by 6.4% to $1.5 trillion at the end of 2024. The 32 responding firms included all 20 phase-one entities (the largest derivatives dealers subject to regulatory IM requirements in the first implementation phase), five of the six phase-two firms and seven of the eight phase-three entities.
ISDA Extends Digital Regulatory Reporting to Support Revised Canadian Reporting Rules. On May 13, ISDA extended its Digital Regulatory Reporting solution to cover new reporting rules in Canada and has made it compatible with a trade reporting messaging format used for North America reporting to maximize the benefit of adoption by those firms subject to the rules. The revisions are being implemented by the Canadian Securities Administrators and are scheduled for implementation on July 25, 2025.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Partner Matt Axelrod’s remarks during a recent webinar co-hosted by Gibson Dunn and the risk intelligence firm Kharon have been reported extensively in the Export Compliance Daily article “50% Rule Could Make Entity List Additions More Difficult, Former BIS Enforcement Chief Says.” In the webinar, Navigating the Evolving Landscape of Export Controls: Trends, Challenges, and Strategies, Matt and other industry leaders discussed the latest trends in export controls program developments, reviewed recent enforcement trends, and provided insights on what to expect going forward.

Read the article, “50% Rule Could Make Entity List Additions More Difficult, Former BIS Enforcement Chief Says,” in Export Compliance Daily.

Gibson Dunn’s New Associate Pods program, which has small groups of new associates in the same practice across different offices meeting once or twice a month with a professional development coach to brainstorm ideas and exchange personal experiences, is the subject of the Law360 Pulse article “Gibson Dunn Helps 1st-Year Associates Connect With ‘Pods.’”

Orange County associate Jonathan Ray and Ryan DuBose, director of professional development and one of six coaches who run the pods, describe how all first-year associates in the firm’s U.S. offices have participated in the virtual program since it was launched in 2020 during the start of the COVID-19 pandemic — over 800 associates to date.

Ryan says the program originated from a desire to ensure that associates could make connections, meet people, and access information and resources while working in different offices. “It was such a success that we’ve just continued it ever since.”

Jonathan adds that, as a new associate, “hearing from other people who were going through that exact same transition in a different part of the country was hugely beneficial, because it allowed me to normalize successes, normalize challenges and really feel integrated and connected at an early stage.”

The New Associate Pods program also involves a lot of one-on-one confidential coaching and professional development with the six coaches, all of whom previously practiced law at big firms.

Read the article, “Gibson Dunn Helps 1st-Year Associates Connect With ‘Pods’,” in Law360 Pulse [PDF].