Crypto’s long battle with SEC comes to a close with Ripple victory
Brad Garlinghouse, CEO of Ripple, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 4, 2022.
Mike Blake | Reuters
The Securities and Exchange Commission’s years-long crusade against the crypto industry appears to be over.
The final chapter closed on Wednesday, when Ripple announced that the SEC had officially dropped its four-year-old lawsuit against the company. The suit, filed on Jay Clayton’s last day as SEC chair, accused Ripple of raising $1.3 billion through the sale of its XRP token without registering it as a security.
Crypto companies and exchanges Coinbase, Kraken, Robinhood, Binance, and OpenSea all previously saw lawsuits or investigations dropped, resolved or put on hold. Ripple is now taking a victory lap.
“Ripple stands alone as the company that fought back — and won on essential legal questions — throwing a major wrench into the SEC’s plans to destroy crypto in the U.S. through enforcement,” Ripple Chief Legal Officer Stuart Alderoty told CNBC in an emailed statement. “The SEC has now abandoned its appeal in our case. In a fitting irony, Ripple was the first major case they brought and will now be the last one they walk away from.”
XRP was created in 2012 as one of the first non-bitcoin cryptocurrencies. It was started by the founders of the company Ripple, and became the platform’s native currency. Like bitcoin, XRP can be bought and sold by retail investors. XRP jumped about 11% after Wednesday’s announcement.
Ripple spent $150 million battling the government in a bruising legal standoff with former SEC Chair Gary Gensler, whose approach to crypto was widely viewed as hostile. In July 2023, a federal judge ruled that XRP is “not necessarily a security on its face,” undercutting the foundation of the SEC’s case.
The win wasn’t just a turning point for Ripple. It signaled to the crypto industry that the tide was turning, and built momentum for a movement that helped return President Donald Trump, a former crypto critic, to the White House. A year after the judge’s ruling, Trump, as Republican nominee, delivered a keynote at the annual Bitcoin Conference, and announced that he was “laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world.”
Ripple and its crypto peers were major contributors to Trump’s campaign. The president has spent his first two months in office paying them back.
New leadership
On Friday, the SEC hosted its first major crypto roundtable, signaling a new approach of regulation through engagement, rather than enforcement. Leading the effort is Hester Peirce, who is helming the regulator’s newly established Crypto Task Force.
Peirce’s message to the industry is that the SEC is no longer an adversary, but is instead trying to give crypto a clear, lawful framework.
In a major policy reversal, the SEC rescinded Staff Accounting Bulletin 121 — a controversial rule that required banks to treat crypto assets as liabilities on their balance sheets. Introduced in 2022 and championed by Gensler, the rule was widely viewed as a major barrier to institutional adoption of bitcoin and other digital assets.
“Bye, bye SAB 121! It’s not been fun,” Peirce wrote on in a post on X after the change was announced in January.
At the World Economic Forum in Davos, Switzerland that month, CEOs from Goldman Sachs, Morgan Stanley, and Bank of America signaled that the thaw in Washington could lead to renewed crypto engagement.
U.S. President Donald Trump sits next to Crypto czar David Sacks at the White House Crypto Summit at the White House in Washington, D.C., U.S., March 7, 2025.
Evelyn Hockstein | Reuters
And at the White House, David Sacks, Trump’s AI and crypto czar, stood beside the president as he signed an executive order on digital assets. Sacks had recently attended the Crypto Ball as part of the inauguration, where he declared, “The war on crypto is over.”
Coinbase’s lawsuit was dismissed in February. Then came Kraken. The SEC pulled back from its Wells Notice against Robinhood’s crypto division. The investigation into Binance is on hold.
Ripple’s legal team long argued that the SEC’s strategy wasn’t about upholding the law, but about using it as a blunt instrument. The regulator sent subpoenas to foreign regulators that worked with Ripple, demanded troves of documents from business partners and even sued CEO Brad Garlinghouse and co-founder Chris Larsen personally. Those charges have also been dropped.
“While this chapter is closed, the fight for clear, fair, and transparent crypto regulation continues,” Alderoty told CNBC. “Ripple will continue to lead that fight.”
Anne Wojcicki, co-founder and chief executive officer of 23andme Inc., during the South by Southwest (SXSW) festival in Austin, Texas, US, on Friday, March 10, 2023.
Jordan Vonderhaar | Bloomberg | Getty Images
Embattled genetic testing company 23andMe, once valued at $6 billion, filed for Chapter 11 bankruptcy protection in Missouri federal court on Sunday night.
The company’s CEO, Anne Wojcicki, has resigned from her role as chief executive effective immediately, though she will remain a member of the board. Joseph Selsavage, 23andMe’s chief financial and accounting officer, will serve as interim CEO, according to a filing with the U.S. Securities and Exchange Commission.
“We have had many successes but I equally take accountability for the challenges we have today,” Wojcicki wrote in a post on X early Monday morning. “There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering.”
23andMe declined to comment further on the filing.
The former billionaire co-founded 23andMe in 2006, and the company rocketed into the mainstream because of its at-home DNA testing kits that gave customers insight into their family histories and genetic profiles. The five-time CNBC Disruptor 50 company went public in 2021 via a merger with a special purpose acquisition company, which valued the company at around $3.5 billion at the time.
23andMe’s stock has mostly been in free fall in recent years as the company struggled to generate recurring revenue and stand up viable research and therapeutics businesses. As of Monday morning, the company has a market capitalization of around $25 million.
Last March, 23andMe’s independent directors formed a special committee to evaluate the company’s potential paths forward. Wojcicki submitted multiple proposals to take the company private, but all were rejected. The special committee “unanimously determined to reject” Wojcicki’s most recent proposal earlier this month.
If 23andMe’s plan to sell its assets through a Chapter 11 plan is approved by the court, the company will “actively solicit qualified bids” over a 45-day process. Wojcicki plans to pursue the company as an independent bidder, she said in her post on Monday.
23andMe has between $100 million and $500 million in estimated assets, as well as between $100 million and $500 million in estimated liabilities, according to the bankruptcy filing.
Beyond its financial woes, privacy concerns around 23andMe’s genetic database have swirled in recent years. In October 2023, hackers accessed the information of nearly 7 million customers.
California Attorney General Rob Bonta on Friday issued a consumer alert urging residents to consider deleting their genetic data from 23andMe’s website.
23andMe said there will be no changes to the way that it stores, protects or manages customer data through the sale process, and it will continue operating business as usual.
“As I think about the future, I will continue to tirelessly advocate for customers to have choice and transparency with respect to their personal data, regardless of platform,” Wojcicki said.
Watch: The rise and fall of 23andMe
Assaf Rappaport, Wiz, on Centre Stage during day one of Web Summit 2021 at the Altice Arena in Lisbon, Portugal.
Harry Murphy | Sportsfile | Getty Images
Google’s acquisition of cybersecurity startup Wiz could be a turning point for an uncertain IPO market and a mergers and acquisitions environment aching from a slowdown in deal activity.
Alphabet announced Tuesday that it plans to buy the Israeli cybersecurity startup for $32 billion in its biggest acquisition ever. The deal came months after an initial $23 billion offer fell through and Wiz CEO Assaf Rappaport touted plans for an initial public offering.
While deal activity has slowed from its 2021 heyday, appetite has begun to pick up.
SailPoint went public in February and CoreWeave, which sells Nvidia’s AI processors, said in a Thursday filing that it plans to raise up to $2.7 billion in its IPO that’s expected this week. Ticket vendor StubHub filed for an IPO Friday.
Wiz’s blockbuster deal could signal the opening of the floodgates for the IPO and M&A markets.
Cybersecurity companies look particularly poised to win as companies hunt for ways to shield their highly profitable business models. CB Insights on Tuesday said cybersecurity solutions are one of the top acquisition target areas for 2025.
“Having a more complete offering for securing workloads in the cloud — that’s the core, the rationale behind [the Wiz] deal,” said Merritt Maxim, Forrester vice president and research director.
AI driving demand for more cybersecurity
The proliferation of artificial intelligence and the transition to the cloud has amplified the need for cybersecurity solutions.
More adept hacking schemes have accelerated since OpenAI’s launch of ChatGPT in late 2022, expediting the need for cutting-edge solutions to fend off attackers. That’s made cybersecurity a key target area for companies looking to protect their business models, said Neil Barlow, partner at the law firm Clifford Chance.
“Hacks and phishing could effectively cause a business to crash,” said Barlow, who focuses on private equity M&A. “This is a business that is fundamental to operating, so cybersecurity has been a resilient area for quite some time.”
While megacap technology giant’s haven’t shied away from cybersecurity investments, AI tailwinds have forced companies to beef up their offerings. Google’s Wiz acquisition could force rival Amazon to make its own acquisition, Maxim said. Potential targets include startups Aqua Security, Orca Security and Sysdig.
“The Google-Wiz tie-up does give them some capabilities that make them stronger than AWS in some areas,” Maxim said. “AWS could target acquisitions to potentially bring their solution closer to Google.”
What’s next for the IPO market
Wiz’s mammoth buyout may dampen near-term sentiment for cybersecurity startups with IPO aspirations, but experts told CNBC they anticipate a pickup in the second half of the year.
One of those contenders is malware and phishing software maker Proofpoint, which told CNBC in October that it was exploring an IPO in the next 12 to 18 months. The company went private in 2021 in a $12.3 billion acquisition by private equity firm Thoma Bravo.
Forrester’s Maxim said Proofpoint and Illumio are companies ripe for IPOs in the coming months. Illumio, which offers data center and cloud security, was a member of CNBC’s Disruptor 50 list in 2017 and 2018.
Netskope, which also offers cloud security, is another company being closely watched for an IPO, said Brianne Lynch, head of market insight at EquityZen. Netskope told The Wall Street Journal last year that it was planning an IPO in the second half of 2025. The company may start to feel pressure from early investors hunting for liquidity 13 years after its founding, Lynch said.
Snyk, a cybersecurity startup founded about a decade ago, has also alluded to a public offering next year. The company was last valued at $7.4 billion and CEO Peter McKay said in a post last year that Snyk had crossed $300 million in annual recurring revenues.
The big question is whether now is the rip-the-band-aid off moment for companies that decide to IPO or whether market volatility will cause companies to once again kick the can down the road, Lynch said.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway