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Volume 6, Issue 3

Welcome

Welcome to our third issue of 2025 of Decoded - our technology law insights e-newsletter.

You are cordially invited to our presentation -- Navigating Compliance -- on April 10 in Pittsburgh, Pennsylvania.

No matter your industry, you are sure to face a wide array of regulations you must comply with, and not doing so can result in severe consequences, including fines and, in the worst case, going out of business entirely. Whether you are in the manufacturing, health care, financial services, or technology industry, we invite you to join our team of professionals from CR Advisory and our own Alison Sacriponte in a discussion of how to assess your compliance weaknesses and then to develop and implement a strategic plan to address them. Click here to learn more and register.

We hope you enjoy this issue and thank you for reading.

Nicholas P. Mooney II, Co-Editor of Decoded; Chair of Spilman's Technology Practice Group; Co-Chair of the Cybersecurity & Data Protection Practice Group; and Co-Chair of the Artificial Intelligence Law Practice Group

and

Alexander L. Turner, Co-Editor of Decoded and Co-Chair of the Cybersecurity & Data Protection Practice Group

SEC may Reverse Proposed Cryptocurrency Custody Rule and Ohio House Lawmakers Weigh Cryptocurrency Legislation

“Regulatory shifts under the Trump administration suggest a more industry-friendly stance towards cryptocurrency firms and financial institutions.”

“Even as he introduced his crypto reserve legislation, Demetriou acknowledged ‘ongoing discussions’ with the Treasurer of State’s Office and that changes reflecting that input are likely.”

Why this is important: The SEC is considering reversing a proposed rule that would impose stricter custody requirements on investment advisers handling cryptocurrencies. Acting SEC Chair Mark Uyeda cited concerns about the rule’s broad scope and compliance challenges. Initially proposed in February 2023, the rule mandated storing crypto assets with qualified custodians and additional safeguards, but industry objections have prompted a reassessment.

Uyeda also mentioned the SEC is reviewing a separate rule requiring monthly portfolio reports for unit trusts and ETFs, which has raised concerns about AI-driven trading strategies. These regulatory shifts align with a broader rollback of cryptocurrency-related initiatives from former Chair Gary Gensler’s tenure.

Recent changes include rescinding accounting guidance for crypto firms, dropping enforcement actions, and forming a crypto task force. With former SEC Commissioner Paul Atkins set to take over as chair, Uyeda’s push signals a more industry-friendly approach, particularly toward digital assets and financial institutions.



The SEC’s reconsideration of stricter cryptocurrency custody rules aligns with broader shifts in U.S. regulatory attitudes toward digital assets, including efforts at the state level, such as Ohio’s push for cryptocurrency legislation. Ohio lawmakers are working on bills to protect crypto users, support mining businesses, and even establish a state cryptocurrency reserve.

State Rep. Steve Demetriou is leading Ohio’s efforts, positioning the state as a digital asset hub. His proposed legislation would allow the state treasurer to invest up to 10 percent of uncommitted funds in cryptocurrencies like Bitcoin, subject to safeguards. Another bill, the Blockchain Basics Act, aims to limit government restrictions on blockchain businesses and prevent local discrimination against crypto data centers.

This shift reflects a growing acceptance of digital assets, contrasting with past federal regulatory crackdowns. With the SEC rolling back certain crypto-related initiatives and Ohio taking steps to embrace blockchain technology, the landscape for digital asset regulation appears to be evolving toward a more industry-friendly approach. --- Shane P. Riley

Rural Hospitals Move to Enhance Cybersecurity

“More than 550 rural hospitals have joined the Cybersecurity for Rural Hospitals Program, a partnership created last year by the American Hospital Association and Microsoft to provide free and heavily discounted cybersecurity services.”

Why this is important: The healthcare industry continues to be one of the leading sectors of our economy targeted for cyberattacks. Protecting this vital part of our economy can be expensive, and often, the most vulnerable targets lack sufficient resources to protect patient data. This includes rural hospitals. In order to assist these rural hospitals, the American Hospital Association and Microsoft are teaming up to provide rural hospitals with free or highly discounted cybersecurity resources. This assistance will plug a hole in the healthcare cybersecurity dam that has been vulnerable for too long. --- Alexander L. Turner

Hundreds of Actors and Hollywood Insiders Sign Open Letter Urging Government not to Loosen Copyright Laws for AI

“The letter states that OpenAI and Google have recently recommended the government remove ‘all legal protections and existing guardrails surrounding copyright law protections for the training of Artificial Intelligence.’'"

 

Why this is important: Artificial intelligence versus original works is a battle of reflection versus reality. The truth is that artificial intelligence regurgitates what it is given; it is neither a human nor an original creator of anything as the law currently states – so the programs and algorithms cannot earn copyright protection for their outputs. The history and jurisprudence of copyright law in the United States are vested with the promise of protection for original works of authorship by humans for a limited time. Supporters of artificial intelligence seek to get a free pass to steal the works and identities of others so they can ultimately undercut the original creators. Actors in Hollywood know that the future of AI is not more work for any human but a backdoor to cut costs and human labor out of the equation of art. While the open letter is gaining traction, the real issue is that the current administration is committed to deregulation and privatization, two forces that could see the effective evisceration of a cannon of intellectual property law. What is needed is balance. Copyright law permits fair use for specific purposes and where fair use expands into infringement, the buck must stop. The trajectory of the support for artificial intelligence in the copyright arena may seem like a tech boom to some, but, in reality, without proper guardrails, it is a heist of the highest form. --- Sophia L. Hines

82% of K-12 Schools Recently Experienced a Cyber Incident

“Cybercriminals are increasingly targeting school networks through phishing and social engineering, a cybersecurity nonprofit reported.”

Why this is important: K-12 schools remain vulnerable to cyberattacks throughout the country. In the 18 months between July 2023 and December 2024, there were 9,300 cyberattacks against 5,000 schools. Beyond the theft of data, cyberattacks on K-12 schools cause a significant disruption of critical services. With attempts to thwart cyberattacks, criminals are using a new tactic of focusing attacks on the people using the schools’ networks through phishing attacks and social engineering, thereby tricking people into divulging log-in information. These attacks are increasing and are successful because school districts lack sufficient funding and manpower to adequately address these threats. To assist school districts protecting themselves against these attacks, the non-profit Center for Internet Security created the Multi-State Information Sharing and Analysis Center to work with schools and other government organizations to protect their computer networks. The federal government has also allocated funding to assist local school districts in fortifying their computer networks. Individual state governments are also assisting local school districts, with 16 states having introduced K-12 cybersecurity bills. It will take a holistic approach to address this ever-increasing problem, but school districts must prioritize cybersecurity. --- Alexander L. Turner

Building The Future: How AI Is Revolutionizing Construction

"Given all the above complexity, it’s little surprise that AI is already making an impact on improving the efficiency and effectiveness of construction projects.”

Why this is important: Artificial intelligence has broad applications in the lifecycle of a construction project. The utilization of AI in the construction process begins with the design and planning of the project. AI is being used to create building information modeling (BIM) tools that will optimize the design of building systems, including the placement and operation of building systems. AI also assists construction managers with improving scheduling, allocation of resources, and risk management. These tools can also be used to provide construction managers with the ability to identify potential delays before they negatively impact the project, and to adjust the project accordingly. AI can also be utilized on the job site to not only monitor the progress of the project, but to also identify health and safety risks and prevent on the job injuries. Finally, AI is being used in autonomous robots that install drywall, lay bricks, pour concrete, or move supplies and equipment around the jobsite. This use of AI throughout the construction project’s lifecycle will increase efficiencies, prevent on the job injuries, and save time and money. --- Alexander L. Turner

Treasury Department Issues Interim Final Rule Limiting the Corporate Transparency Act to Foreign Reporting Companies

By Brienne T. Marco and Joseph C. Unger

On March 26, 2025, the Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) published an interim final rule to narrow the existing beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) to require only entities previously defined as “foreign reporting companies” to report BOI. Under this interim final rule, entities previously defined as “domestic reporting companies” are exempted from the reporting requirements and do not have to report BOI to FinCEN, or update or correct BOI previously reported to FinCEN. 

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