Today’s ever-shifting business environment means that consumers, businesses, employers, and employees all expect to transact digitally. To remain efficient and competitive, companies must digitally transform their businesses. Successful transformation and maintenance require careful planning and up-to-date knowledge to ensure smooth integration with existing business technology, positive customer experience, and ongoing regulatory compliance.
This newsletter includes legal insights and brief summaries of recently enacted federal and state laws, federal and state regulatory activities, fresh judicial precedent, and other important news to keep you up to date in the ever-evolving electronic environment.
If you’d like to discuss one of these items, or a project you’re considering, please reach out to one of the editors – and, if there is a topic you’d like us to cover in a future Insight, we’d love to hear from you.
REGULATORY DEVELOPMENTS
FEDERAL
WHITE HOUSE
President Trump issues Executive Order on digital fintech. On January 23, 2025, the White House announced that President Donald Trump signed an Executive Order (EO) titled, “Strengthening American Leadership in Digital Financial Technology.” The EO directed digital asset regulators to provide “regulatory clarity” and “well-defined jurisdictional regulatory boundaries” in accordance with President Trump’s policies to support the growth and use of digital assets, blockchain technology, and related innovations while protecting economic liberty. The EO discussed the risk of Central Bank Digital Currencies (CBDCs) and prohibited the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the US. The EO also directed the revocation of a March 2022 EO on “Ensuring Responsible Innovation in Digital Assets" and the US Department of the Treasury’s Framework for International Engagement on Digital Assets. Finally, the EO established a Working Group on Digital Asset Markets to be comprised of various governmental agencies, including the Commodity Futures Trading Commission (CFTC), the US Securities and Exchange Commission (SEC), and the Federal Reserve, as well as the heads of agencies in the Executive Branch. The EO charges the Working Group to identify all regulations, guidance documents, orders, or other items that affect the digital asset sector. The Working Group is also required to submit to its Chair, David Sacks, recommendations on whether each identified regulation, guidance document, order, or other item should be rescinded or modified; or, for items other than regulations, adopted in a regulation. Within 180 days of the date of the EO, the Working Group must submit its report to President Trump. The report should:
- Propose a federal regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the US, considering provisions for market structure, oversight, consumer protection, and risk management, and
- Evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile.
President Trump signs EO on deregulation. On January 31, 2025, the White House announced that President Trump signed an EO titled, “Unleashing Prosperity Through Deregulation.” The EO requires all governmental agencies – when promulgating a new rule, regulation, or guidance – to “identify at least 10 existing rules, regulations, or guidance documents to be repealed.” The Director of the Office of Management and Budget is charged to ensure standardized measurement and estimation of regulatory costs to meet the EO’s requirement that the costs of all regulations be net negative (that is, below zero) for fiscal year 2025.
CFPB
CFPB closed for work. On February 10, 2025, the new Consumer Finance Protection Bureau (CFPB) Acting Director, Russel Vought, reportedly notified CFPB staff they cannot “perform any work tasks” and “should not come into the office.” This notice came after Director Vought directed staff to cease any pending investigations and announced on X (formerly Twitter) that he had notified the Federal Reserve that the CFPB "will not be taking its next draw of unappropriated funding because it is not 'reasonably necessary' to carry out its duties." Director Vought permitted the CFPB to use its “current balance of $711.6 million” to continue to pay salaries and operating expenses. The status of CFPB initiatives (including the two listed below), is unclear.
CFPB proposes interpretive rule on EFTA applicability to cryptocurrency. On January 15, 2025, the CFPB announced it seeks public comment on a Notice of Proposed Interpretive Rule which would expand CFPB regulatory authority under the Electronic Fund Transfer Act (EFTA) and Regulation E to “new and emerging digital payment mechanisms” such as stablecoins, crypto, and virtual currencies. The EFTA and Regulation E provides consumers with protections against errors and fraud, and the right to dispute erroneous or fraudulent transactions. The proposed rule expands the definitions of “funds” to include digital assets used as a medium of exchange or for payments, and broadens “accounts” to include virtual currency wallets, gaming platform accounts, and proprietary digital balance products, provided they are used for personal, family, or household purposes. Comments on the proposed interpretive rule will be accepted through March 31, 2025.
CFPB issues RFI on digital payment privacy and consumer protections. On January 10, 2025, the CFPB announced it seeks public input on strengthening privacy protections and preventing harmful surveillance in digital payments, particularly those offered through large technology platforms. The request for information (RFI) seeks comments about the effectiveness (or lack thereof) of existing regulations, including the existing model form, privacy notices, and opt-out mechanisms. The request solicits input on ways to strengthen the existing framework, as well as the types of data the public believes that the CFPB should monitor on a routine basis. Comments are due on or before April 11, 2025.
SEC
SEC authorizes remote online notarization for Form ID. On December 27, 2024, the SEC amended the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filing manual. This amendment allows persons seeking to file on the SEC EDGAR system to use electronic or remote online notarization for the Form ID EDGAR application, in accordance with Rule 10 of Regulation S-T. Pursuant to Volume I of the EDGAR Filer Manual, notarization may be obtained through a remote online notary recognized by the law of any state or territory in the US or the District of Columbia.
DOJ
DOJ issues guidance on state and local government compliance with ADA for websites. On January 8, 2025, the Department of Justice (DOJ) issued a guidance document titled, “State and Local Governments: First Steps Toward Complying with the Americans with Disabilities Act Title II Web and Mobile Application Accessibility Rule.” The guidance was issued to help state and local governments prepare for compliance with the April 2024 DOJ rule, which sets technical requirements for website and mobile app accessibility compliance.
STATE
eFilings and eSignatures
Texas Supreme Court adopts technology standards for electronic filings. On January 31, 2025, the Texas Supreme Court adopted the Technology Standards, Version 9.0, effective immediately, which apply to documents filed electronically under Texas Rule of Civil Procedure 21 and Texas Rule of Appellate Procedure 9. The technology standards establish technical specifications for documents and audio/video electronically filed with the court and set forth a process for eFiling.
New Jersey allows electronic signatures on certain tax forms. On February 12, 2025, the New Jersey Division of Taxation issued a clarification on the allowable signature format for GIT/REP-1, 3, and 4A forms for eRecording. “[I]f at closing, the seller e-signs a completed official Form GIT/REP-1, 3, or 4A using DocuSign or similar applications at the same time as the deed is e-notarized and e-signed, this is also acceptable, and no resubmission is required if the county clerk’s office accepts and records the deed filing. However, if a county clerk rejects a deed filing solely due to the GIT/REP form, the seller must correct the GIT/REP form as requested by the county clerk and resubmit the filing.” The Division noted that the decision to accept or reject a deed for recording is made by county clerks.
Money transmission
Massachusetts adopts law regulating domestic money transmission. Massachusetts adopted H4840 on January 1, 2025, which requires a license for anyone who transmits money or holds itself out as providing money transmission services with respect “to those transactions engaged in by a person for personal, family or household purposes.” The new law expands upon existing state licensing requirements which only covered foreign remittance transactions and will take effect in September 2025.
Electronic and remote notarization
North Carolina validates remote notarizations performed during disasters. SB382 became law on December 11, 2024, overriding former Governor Roy Cooper’s veto. The disaster relief bill included provisions validating emergency video notarization and witnessing performed between July 1, 2024, and September 8, 2024, in accordance with 10B-25 and 10B Article 3 of the General Statutes.
Pennsylvania proposes rules for electronic and remote online notarization. On December 21, 2024, the Pennsylvania Department of State proposed rules under the state Revised Uniform Law on Notarial Acts 57 Pa.C.A. Chapter 3 which would address electronic notarial acts and remote notarization. This proposed rulemaking will be effective upon final-form publication in the Pennsylvania Bulletin.
CASE LAW
FEDERAL
TCPA
Eleventh Circuit re-opens TCPA lead generator loophole. In Insurance Marketing Coalition Limited v. Federal Communications Commission, the Eleventh Circuit Court of Appeals overturned the Federal Communications Commission (FCC)'s 2023 legislative rule, which interpreted the phrase “prior express consent,” and introduced new restrictions on telemarketing and advertising robocalls under the Telephone Consumer Protection Act (TCPA). The FCC's 2023 rule stipulated that consumers cannot consent to such robocalls unless (1) they agree to receive calls from only one entity at a time (ie, “one-to-one consent”), and (2) consent solely to calls whose subject matter is "logically and topically associated with the interaction that prompted the consent." The Insurance Marketing Coalition Limited (IMC) challenged these restrictions, arguing that the FCC exceeded its statutory authority, violated the First Amendment, and that the rule was arbitrary and capricious because it lacked a factual basis for the new restrictions.
The court agreed with IMC's first argument, determining that the FCC's new consent restrictions conflicted with the ordinary statutory and common law meaning of "prior express consent" as defined in the TCPA. The court concluded that the FCC had overstepped its authority by imposing these additional consent requirements, which were not supported by the TCPA's statutory language. As a result, the court granted IMC's petition and remanded the case for further proceedings.
As a result of this ruling, the FCC issued an order postponing the effective date for the 2023 legislative rule to January 26, 2026, “pending judicial review of the adopted rule.”
Supreme Court hears oral arguments on court deference to FCC orders. On January 21, 2025, the US Supreme Court heard oral arguments regarding whether the Hobbs Act requires district courts to treat as binding precedent FCC “final orders” interpreting the TPCA. Petitioners in the case of McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation argue that the district court does not have to treat FCC orders as binding precedent and, instead, may make its own interpretation of the TCPA. Respondent’s position is that the Hobbs Act grants only courts of appeal the authority to determine the validity of FCC orders. A ruling by the Supreme Court will resolve the current split among federal courts – with the Ninth Circuit holding the Hobbs Act’s exclusive jurisdiction provision to foreclose district court review of an FCC order, while the Second, Third, Fourth, and Eighth Circuits held FCC orders interpreting the TCPA to be nonbinding on district courts. Further, the Seventh Circuit held that its district courts are not bound by FCC rules.
Online faxes are not subject to TCPA. In ASTRO Co., LLC v. Westfax Inc., Civil Action No. 1:23-cv-02328-SKC-CYC, 2025 US Dist. LEXIS 25629 (D. Colo. Feb. 12, 2025), the US District Court for the District of Colorado determined that the TCPA did not apply to online fax services. ASTRO Co., LLC alleged that Westfax Inc. and other defendants sent unsolicited advertisements, or "junk faxes," to its fax numbers, received by ASTRO using its online fax service which delivered the faxes in the form of emails to ASTRO employees. The court's decision centered on their determination that online fax services do not fall under the definition of "telephone facsimile machines" as outlined in the TCPA, because the statute specifically contemplates traditional fax machines that receive and print faxes directly – shifting the advertising costs to the fax recipient through automatic printing of the faxes and occupation of their fax telephone lines.
The court further explained that its decision aligns with the FCC’s stance that online fax services do not cause the specific harms the TCPA aims to prevent, as reflected in the FCC’s 2019 declaratory ruling in In re Amerifactors Financial Group, LLC Petition for Expedited Declaratory Ruling et al., 34 FCC Rcd 11950.
Money transmission
KuCoin settles unlicensed money transmission charge for nearly $300 million. On January 27, 2025, the DOJ announced it had settled criminal charges against Peken Global, Limited, which is the Seychelles-based entity operating KuCoin, one of the largest cryptocurrency exchanges globally. According to the announcement, Peken pled guilty to operating an unlicensed money transmitting business and agreed to pay nearly $300 million in penalties and exit from the US market within two years. KuCoin violated anti-money laundering (AML) laws by failing to implement effective AML and know-your-customer (KYC) programs. The exchange also failed to report suspicious transactions and did not register with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). As a result, KuCoin facilitated billions of dollars in suspicious transactions, including proceeds from darknet markets, malware, ransomware, and fraud schemes.
Since its founding in 2017, KuCoin has accumulated more than 30 million customers worldwide, with a significant presence in the US market, where it earned approximately $184.5 million in fees from 1.5 million registered users. Despite its substantial operations, KuCoin did not require customers to provide identifying information until August 2023, when it adopted a mandatory KYC program. However, this program was not retroactively applied to existing customers who only wanted to withdraw or close positions. The settlement also included criminal forfeitures and fines totaling over $297 million, with KuCoin's founders, Chun Gan and Ke Tang, agreeing to forfeit $2.7 million each. The US Attorney's Office praised the investigative work of the El Dorado Task Force and Homeland Security Investigations in bringing this case to a resolution.
Unauthorized transfer of data
Allegations of unauthorized medical data transmission to social media and browsers survive motion to dismiss. In Gaige v. Exer Holding Co., LLC, No. 2:24-cv-06099-AH-(AJRx), 2025 U.S. Dist. LEXIS 17146 (C.D. Cal. Jan. 30, 2025), decided on January 30, 2025, the US District Court for the Central District of California found that the plaintiff, a longtime patient of Exer Holding Co., which operates over 55 medical clinics, had sufficiently alleged injury traceable to his use of the defendant’s website, and allowed the case to proceed.
The plaintiff claimed that his use of the defendant's website, which allowed patients to book appointments, pay bills, and research medical information, led to the unauthorized disclosure of his medical information and Facebook ID. The plaintiff further claimed that this resulted in targeted advertisements related to his medical conditions appearing on his Facebook and Instagram accounts. The plaintiff asserted that the defendant used tracking technologies to intercept and transmit patients' sensitive communications to third parties like Meta Platforms, Inc. (Meta) and Google, violating the Federal Electronic Communications Privacy Act (ECPA), the California Invasion of Privacy Act (CIPA), the California Confidentiality of Medical Information Act (CMIA), and the California Constitution.
The court found that the plaintiff sufficiently alleged that the website's use resulted in unauthorized disclosures leading to targeted ads. It also held that dismissing the complaint as time-barred would be premature, given the plaintiff’s allegations of delayed discovery and fraudulent concealment. Additionally, the court concluded that the plaintiff had adequately alleged the disclosure of personally identifiable information, such as his Facebook ID and IP address combined with his health information. Notably, the court highlighted that, unlike in prior cases, the plaintiff specified the medical information disclosed. The court granted in part and denied in part the defendant's motions to dismiss the class action complaint, and denied the defendant’s motion to strike class allegations.
Electronic contracting
Minor bound to online arbitration agreement. In Angelilli v. Activision Blizzard, Inc., No. 23-cv-16566, 2025 U.S. Dist. LEXIS 28315 (N.D. Ill. Feb. 18, 2025), the US District Court for the Northern District of Illinois addressed the enforceability of electronic agreements and arbitration clauses in video game transactions. The court evaluated whether a minor was bound by electronic terms of service requiring arbitration, and whether his parent was similarly bound. Plaintiffs argued that the minor agreed to the arbitration provision without proper parental consent, challenging the enforceability of electronic payment authorizations tied to clickwrap agreements. The court found that the minor formed an agreement to arbitrate by playing the game and accepting the terms electronically, despite his minority status. However, the court declined to extend the arbitration agreement to his parent as she was a non-signatory and had not explicitly agreed to the terms. The court further suggested that where a user affirmatively agrees to payment terms as part of an electronic contract, challenges to enforceability are generally subject to arbitration rather than litigation.
STATE
eNotary
Additional documentation required to admit electronically notarized document in Connecticut. In Synchrony Bank v. Aubin, 2025 Conn. Super. LEXIS 40, the Superior Court of Connecticut on January 8, 2025 held that further documentation was necessary to determine the sufficiency of an affidavit of debt which was signed and notarized using electronic signatures. The bank argued that the Connecticut Uniform Electronic Transfer Act (UETA) permitted electronic notarization, even though Connecticut notarial law does not expressly authorize notarial acts on electronic records or using electronic signatures. The magistrate judge declined to give effect to the affidavit in its present form. The judge requested additional documentation in the form of the notary commission signature to determine whether the notarized affidavit included “all other information required to be included by other applicable law,” such as state notarial laws.
Electronic signatures
Email exchange constitutes a signed settlement agreement. In Thang, et al v. Defy International, LLC, 2025 WL 212076 (Ct. App. Tx. Jan. 16, 2025), the Court of Appeals of Texas, Houston, held, in part, that the parties signed a Rule 11 settlement agreement reached by exchange of emails, overturning the decision of the lower court. The Rule 11 agreement was negotiated by counsel for the parties via email to settle the defendant’s claims in an underlying action, and involved the sale of the leased property to the defendant and a release of all claims. Despite the agreement, the defendant failed to sign the formal settlement documents or close on the property sale after repeated delays. The defendant subsequently sent a letter declining to purchase the property.
Applying Texas law, the court noted that Rule 11 agreements were an exception to the state UETA, so the court looked at cases pre-dating the UETA or otherwise addressing the requirement of a signed writing under Rule 11. In finding that the Rule 11 agreement was signed by typed or printed signature in the email exchange, the court noted that the email exchange set forth an outline of terms and included the typed name of the email sender along with an automatic signature block. The emails also included express language of agreement (ie, “Assuming Jason and you agree we have a deal.” “We are agreed.”). The court stated, “Regardless of whether parties to a Rule 11 agreement type their names with a typewriter, a computer keyboard, or a touchscreen, and regardless of whether they type their names in an email or create a “signature block” to be included with their email, the effect is the same. They have signed it.”
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