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A visual representation of the digital cryptocurrency, XRP.

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The XRP cryptocurrency soared on Wednesday as investors grew hopeful that Ripple, a company closely associated with the token, would win its prolonged legal battle with the U.S. Securities and Exchange Commission.

The token was worth around 45 cents at about 8 a.m. ET, according to data from CoinGecko, up over 11% in the last 24 hours. It was earlier trading up as much as 20%.

Traders pointed to a supplemental notice submitted by Ripple on Monday which pointed to a ruling in a separate case concerning Binance.US’ rescue plan for collapsed crypto lender Voyager Digital. Under the plan, Binance’s U.S. unit was to buy all of Voyager’s assets, including its native VGX token, in a $1.3 billion deal.

The SEC rejected the plan, arguing VGX was akin to a security and calling Binance an unregistered securities exchange, according to the notice from Ripple.

However, the judge rejected the SEC’s objections and approved the bankruptcy plan citing what he called the “vagueness” of the regulator’s arguments and stating the SEC had not “offered any guidance at all as to just what it was that the Debtors allegedly were supposed to prove” to demonstrate VGX was not a security, according to the Ripple letter.

The SEC wasn’t immediately available for comment when contacted by CNBC.

The SEC accuses Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen of breaching U.S. securities laws by selling XRP without first registering it with the regulator. Ripple contests the SEC’s allegations, maintaining the view that XRP should be considered a digital currency rather than a security.

Monica Long, president of Ripple, told CNBC Wednesday morning that she was “very hopeful” about achieving a positive resolution to the SEC battle, adding she thinks it will reach a conclusion sometime this year.

Ripple optimistic about reaching positive resolution to SEC case, president says

Long said she thinks it’s “very unlikely” the judge will rule in favor of the SEC “considering by our view both the facts and the law are on our side.”

If XRP were to be deemed a security, it could have huge ramifications for the digital currency industry.

Floods of tokens may end up falling into the same category, making them regulated financial instruments that would need SEC supervision and frequent transparency disclosures.

Market sentiment improving

Ripple and the SEC have now both submitted their final round of briefs seeking a summary judgment to the case. The case now rests with Judge Analisa Torres of the Southern District of New York, who is expected to issue a verdict soon.

It is not clear when she will make her decision. However, some crypto investors believe an outcome will arrive in the coming days.

XRP “is being bolstered by a potential positive outcome in the SEC case,” Vijay Ayyar, vice president of international at crpyto exchange Luno, told CNBC via email Wednesday.

The token, which is the sixth-largest globally by market value, is also being boosted by the broader crypto market sentiment, Ayyar said.

Bitcoin is up 70% since the start of the year and is currently trading above $28,000 for the first time in nine months. Ether, the second-biggest token, has risen 50% year-to-date.

“Overall, crypto markets have rallied in the past week or so, given the anticipation of a pause or slow down in interest rates and the slowdown in inflation,” according to Ayyar.

Regulation by enforcement?

Ripple’s Long said she believed the SEC was regulating through enforcement rather than establishing clear regulations for the sector. Europe is more advanced in its treatment of crypto, she argued, highlighting the bloc’s Markets in Crypto Assets regulation as an example.

“We’re seeing action through enforcement vs. setting clear rules and regulation which is what all of us in the industry desire,” Long said.

“Europe is really emerging as a leader in setting really clear regulations and rules that allow crypto companies and also traditional finance to embrace crypto.”

For its part, the SEC has said it wants all crypto companies and projects to bring their operations into compliance with federal securities laws.

In an interview with CNBC in February after a crackdown on the crypto exchange Kraken, SEC Chair Gary Gensler said, “There’s a handful of tokens that have actually registered. The intermediaries, the storefronts if you wish, the casinos that people are investing in and investing at need to properly comply and disentangle these bundled products.”

“If this field has any chance of survival and success, it’s time-tested rules and laws to protect the investing public.”

In recent weeks, the regulator has taken aim at numerous crypto firms alleging they are engaged in illegal securities offerings.

Stablecoin issuer Paxos said the SEC served it with a notice threatening legal action over claims that BUSD, the native stablecoin of crypto exchange Binance, was a security that should have been registered with the regulator.

The regulator also hit crypto lender Genesis and exchange Gemini with charges alleging a high-yield investment product offered by the two companies should have been treated as a security.

WATCH: Bitcoin at $10,000 — or $250,000? Investors are sharply divided on 2023

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TSMC beats first-quarter revenue and profit expectations on strong AI chip demand

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April 18, 2024

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TSMC beats first-quarter revenue and profit expectations on strong AI chip demand

A logo of Taiwan Semiconductor Manufacturing Company (TSMC) is seen during the TSMC global RnD Center opening ceremony in Hsinchu on July 28, 2023. (Photo by Amber Wang / AFP)

Amber Wang | Afp | Getty Images

Taiwan Semiconductor Manufacturing Company on Thursday beat revenue and profit expectations in the first quarter, thanks to continued strong demand for advanced chips, particularly those used in AI applications.

Here are TSMC’s first-quarter results versus LSEG consensus estimates:

  • Net revenue: 592.64 billion New Taiwan dollars ($18.87 billion), vs. NT$582.94 billion expected
  • Net income: NT$225.49 billion, vs. NT$213.59 billion expected

TSMC reported net revenue rose 16.5% from a year ago to NT$592.64 billion, while net income increased 8.9% from a year ago to NT$225.49 billion. The firm guided first-quarter revenue to be between $18 billion and $18.8 billion.

TSMC is the world’s largest producer of advanced processors and counts companies such as Nvidia and Apple as its clients.

“TSMC is well-positioned for strong performance based on key industry trends. The continued demand for advanced chips, particularly those used in AI applications, is a positive sign for both the short and long term. The focus on advanced chip development, like the shift towards 3nm technology, is another factor driving long-term growth for TSMC,” Brady Wang, associate director at Counterpoint Research, said on Monday ahead of the results.

TSMC currently produces 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025. Typically, a smaller nanometer size yields more powerful and efficient chips. 

Strong demand for AI chips led by the proliferation of large language models such as ChatGPT and Chinese clones has caused TSMC’s shares to surge 56% in the past one year.

TSMC accounted for 61% of global foundry revenue in the fourth quarter, according to Counterpoint Research data. Samsung Foundry came in second with 14% of the market.

“TSMC’s net profit margin continues to be one of the highest in the company’s history at 40%, against an industry average of 14%, demonstrating TSMC’s strong competitive position. The high margin is the result of an increased share of sales of 7nm and smaller chips, which have significantly higher margins,” Grzegorz Drozdz, market analyst at Conotoxia, said last week.

The U.S. also recently granted TSMC’s Arizona subsidiary preliminary approval for government funding worth up to $6.6 billion to build the world’s most advanced semiconductors. TSMC is also eligible for about $5 billion in proposed loans.

Earlier this month, Taiwan was hit by an earthquake – its strongest one in 25 years. A TSMC spokesperson said its construction sites were normal upon initial inspection, though workers from some fabs were briefly evacuated. Those workers subsequently returned to their workplaces.

This is breaking news. Please check back for updates.

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Elon Musk says in email that Tesla sent ‘incorrectly low’ severance packages to some laid-off employees

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April 18, 2024

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Elon Musk says in email that Tesla sent 'incorrectly low' severance packages to some laid-off employees

Elon Musk, Chief Executive Officer of Tesla and owner of X, formerly known as Twitter, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, June 16, 2023. 

Gonzalo Fuentes | Reuters

Tesla CEO Elon Musk sent an internal email on Wednesday, telling staffers that the company sent out some severance packages that were too low to a number of laid-off workers this week.

“As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low,” Musk wrote in the brief email. “My apologies for this mistake. It is being corrected immediately.”

Tesla didn’t immediately respond to a request for comment.

The electric vehicle company said on Monday that it would be cutting more than 10% of its global workforce, which totaled around 140,000 employees at the end of 2023.

Few details have been shared by the company about the layoffs, but in a companywide memo sent on Monday, Musk said the layoffs would help, “prepare the company” for a “next phase of growth.”

Earlier this month, Reuters reported that Tesla would be shifting its strategy, and scrapping an earlier plan to produce a more affordable EV in favor of focusing on robotaxi development at Musk’s direction. On Tuesday this week, Musk appeared to confirm that report in a post on X.

Musk hasn’t yet said whether Tesla will stick with his 2023 “master plan,” which laid out “a proposed path to reach a sustainable global energy economy through end-use electrification and sustainable electricity generation and storage.”

The company reported an 8.5% year-over-year decline in first-quarter deliveries, the first drop since 2020, when operations were disrupted by the global pandemic.

Tesla is set to discuss first-quarter results with shareholders on April 23, and executives are likely to reveal more about the restructuring and which departments were most impacted.

In a proxy filing out on Wednesday, Tesla asked shareholders to approve a CEO pay package for Musk that’s equivalent to the record compensation plan the company previously granted him in 2018.

His earlier CEO pay plan, worth $56 billion, was voided in a ruling by Delaware chancery court judge Kathaleen McCormick, who decided that, as CEO, Musk controlled Tesla, and the board’s compensation committee wasn’t independent, among other factors.

Tesla shares have dropped about 37% this year as of Wednesday, closing at $155.45.

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Google terminates 28 employees after multi-city protests: Read the full memo

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April 18, 2024

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Google terminates 28 employees after multi-city protests: Read the full memo

Google terminated 28 employees Wednesday, according to an internal memo viewed by CNBC, after a series of protests against labor conditions and the company’s contract to provide the Israeli government and military with cloud computing and artificial intelligence services.

The news comes one day after nine Google workers were arrested on trespassing charges Tuesday night after staging a sit-in at the company’s offices in New York and Sunnyvale, California, including a protest in Google Cloud CEO Thomas Kurian’s office.

Some of the arrested workers in New York and Sunnyvale, who spoke with CNBC earlier on Wednesday, said that during the protest they were locked out of their work accounts and offices, placed on administrative leave and told to wait to return to work until being contacted by HR.

On Wednesday evening, a memo sent by Chris Rackow, Google’s vice president of global security, told Googlers that “following investigation, today we terminated the employment of twenty-eight employees found to be involved. We will continue to investigate and take action as needed.”

The arrests, which were livestreamed on Twitch by participants, follow rallies outside Google offices in New York, Sunnyvale and Seattle, which attracted hundreds of attendees, according to workers involved. The protests were led by the “No Tech for Apartheid” organization, focused on Project Nimbus — Google and Amazon’s joint $1.2 billion contract to provide the Israeli government and military with cloud computing services, including AI tools, data centers and other cloud infrastructure.

“This evening, Google indiscriminately fired over two dozen workers, including those among us who did not directly participate in yesterday’s historic, bicoastal 10-hour sit-in protests,” No Tech for Apartheid said in a statement, adding, “In the three years that we have been organizing against Project Nimbus, we have yet to hear from a single executive about our concerns. Google workers have the right to peacefully protest about terms and conditions of our labor. These firings were clearly retaliatory.”

Protesters in Sunnyvale sat in Kurian’s office for more than nine hours until their arrests, writing demands on Kurian’s whiteboard and wearing shirts that read “Googler against genocide.” In New York, protesters sat in a three-floor common space. Five workers from Sunnyvale and four from New York were arrested.

“On a personal level, I am opposed to Google taking any military contracts — no matter which government they’re with or what exactly the contract is about,” Cheyne Anderson, a Google Cloud software engineer based in Washington, told CNBC earlier on Wednesday. “And I hold that opinion because Google is an international company and no matter which military it’s with, there are always going to be people on the receiving end… represented in Google’s employee base and also our user base.” Anderson had flown to Sunnyvale for the protest in Kurian’s office and was one of the workers arrested Tuesday.

“Google Cloud supports numerous governments around the world in countries where we operate, including the Israeli government, with our generally available cloud computing services,” a Google spokesperson told CNBC on Wednesday evening, adding, “This work is not directed at highly sensitive, classified, or military workloads relevant to weapons or intelligence services.”

The demonstrations show Google’s increased pressure from workers who oppose military use of its AI and cloud technology. Last month, Google Cloud engineer Eddie Hatfield interrupted a keynote speech from the managing director of Google’s Israel business stating, “I refuse to build technology that powers genocide.” Hatfield was subsequently fired. That same week, an internal Google employee message board was shut down after staffers posted comments about the company’s Israeli military contracts. A spokesperson at the time described the posts as “divisive content that is disruptive to our workplace.”

On Oct. 7, Hamas carried out deadly attacks on Israel, killing 1,200 and taking more than 240 hostages.  The following day, Israel declared war and began implementing a siege of Gaza, cutting off access to power, food, water and fuel. At least 33,899 people have been killed in the Gaza Strip since that date, the enclave’s Health Ministry said Wednesday in a statement on Telegram. In January at the U.N.’s top court, Israel rejected genocide charges brought by South Africa.

The Israeli Ministry of Defense reportedly sought consulting services from Google to expand its access to Google Cloud services. Google Photos is one platform used by the Israeli government to conduct surveillance in Gaza, according to The New York Times.

“I think what happened yesterday is evidence that Google’s attempts to suppress all of the voices of opposition to this contract are not only not working but actually having the opposite effect,” Ariel Koren, a former Google employee who resigned in 2022 after leading efforts to oppose the Project Nimbus contract, told CNBC earlier on Wednesday. “It’s really just creating more agitation, more anger and more commitment.”

The New York sit-in started at noon ET and ended around 9:30 p.m. ET. Security asked workers to remove their banner, which spanned two floors, about an hour into the protest, according to Hasan Ibraheem, a Google software engineer based in New York City and one of the arrested workers.

“I realized, ‘Oh, the place that I work at is very complicit and aiding in this genocide — I have a responsibility to act against it,'” Ibraheem told CNBC earlier on Wednesday. Ibraheem added, “The fact that I am receiving money from Google and Israel is paying Google — I am receiving part of that money, and that weighed very heavily on me.”

The New York workers were released from the police station after about four hours.

The workers were also protesting their labor conditions — namely “that the company stop the harassment, intimidation, bullying, silencing, and censorship of Palestinian, Arab, Muslim Googlers — and that the company address the health and safety crisis workers, especially those in Google Cloud, are facing due to the potential impacts of their work,” according to a release by the campaign.

“A small number of employee protesters entered and disrupted a few of our locations,” a Google spokesperson told CNBC Wednesday evening. “Physically impeding other employees’ work and preventing them from accessing our facilities is a clear violation of our policies, and completely unacceptable behavior. After refusing multiple requests to leave the premises, law enforcement was engaged to remove them to ensure office safety. We have so far concluded individual investigations that resulted in the termination of employment for 28 employees, and will continue to investigate and take action as needed.”

Read the full memo below.

Googlers,

You may have seen reports of protests at some of our offices yesterday. Unfortunately, a number of employees brought the event into our buildings in New York and Sunnyvale. They took over office spaces, defaced our property, and physically impeded the work of other Googlers. Their behavior was unacceptable, extremely disruptive, and made co-workers feel threatened. We placed employees involved under investigation and cut their access to our systems. Those who refused to leave were arrested by law enforcement and removed from our offices.

Following investigation, today we terminated the employment of twenty-eight employees found to be involved. We will continue to investigate and take action as needed.

Behavior like this has no place in our workplace and we will not tolerate it. It clearly violates multiple policies that all employees must adhere to — including our Code of Conduct and Policy on Harassment, Discrimination, Retaliation, Standards of Conduct, and Workplace Concerns.

We are a place of business and every Googler is expected to read our policies and apply them to how they conduct themselves and communicate in our workplace. The overwhelming majority of our employees do the right thing. If you’re one of the few who are tempted to think we’re going to overlook conduct that violates our policies, think again. The company takes this extremely seriously, and we will continue to apply our longstanding policies to take action against disruptive behavior — up to and including termination.

You should expect to hear more from leaders about standards of behavior and discourse in the workplace.

Chris

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