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    Virgin Galactic targets May 25 for first spaceflight since Richard Branson’s trip

    Virgin Galactic is targeting as early as May 25 for the launch of its next spaceflight.
    The Unity 25 mission marks both the company’s first in nearly two years since flying founder Sir Richard Branson and its planned last step before beginning commercial service.
    It represents the company’s fifth spaceflight to date, launching out of Spaceport America in New Mexico.

    Carrier aircraft VMS Eve is seen in the background shortly after releasing VSS Unity, which is firing its engine and acclerating during the company’s fourth spaceflight test, Unity 22, carrying founder Richard Branson on July 11, 2021.
    Virgin Galactic

    Virgin Galactic is targeting as early as May 25 for the launch of its next spaceflight, which marks both its first in nearly two years since flying founder Sir Richard Branson and its planned last step before beginning commercial service.
    Called Unity 25, the mission represents the company’s fifth spaceflight to date, launching out of Spaceport America in New Mexico. It is a “final assessment” flight, with six Virgin Galactic employees onboard for a short trip to the edge of space.

    The update comes after a longer-than-expected refurbishment period for the company’s spacecraft: A couple months after Branson’s flight, and following an FAA investigation into a mishap during his trip, the company paused operations for what was intended to be an “eight to 10 months” process – but ended up taking nearly 16 months instead.
    Shares of Virgin Galactic rose about 5% in premarket trading Wednesday following the announcement. The company reported first-quarter results earlier this month that revealed widening losses as it funds development and expansion of its spacecraft fleet.

    Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

    In-house pilots Mike Masucci and CJ Sturckow will fly spacecraft VSS Unity, while Jameel Janjua and Nicola Pecile will fly carrier aircraft VMS Eve. In the passenger cabin will be Chief Astronaut Instructor Beth Moses, as well as astronaut instructor Luke Mays, senior engineering manager Christopher Huie, and senior manager of internal communications Jamila Gilbert.
    Virgin Galactic’s approach to space tourism is to fly up to an altitude of about 40,000 feet, release the spacecraft and fire its engine to climb past 80 kilometers (or about 262,000 feet) – the altitude the U.S. recognizes as the boundary of space.
    Known as sub-orbital, this type of spaceflight gives passengers a couple minutes of weightless, unlike the much longer, more difficult, and more expensive orbital flights conducted by Elon Musk’s SpaceX. After flying on his own craft in 2021, Branson told CNBC he hopes to fly with SpaceX.
    Depending on the outcome and data gathered from Unity 25, the company aims to fly its first commercial mission in “late June.” More

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    IRS flagged more than 1 million tax returns for identity fraud in 2023

    The IRS had flagged more than 1 million tax returns by early March as being filed by potential identity thieves, the U.S. Department of the Treasury said.
    Identity theft has been a growing problem, and the IRS has stepped up its security measures.
    Taxpayers can take preventative measures, such as requesting an Identity Protection Personal Identification Number ahead of tax season.

    Pgiam | Istock | Getty Images

    The IRS flagged more than 1 million tax returns for potential identity theft during the 2023 tax season, according to the U.S. Department of the Treasury, signaling that such fraud continues to be a pervasive problem for taxpayers.
    Tax-related identity theft occurs when criminals use a taxpayer’s personal information to file a return in their name to claim their federal tax refund.

    The IRS identified nearly 1.1 million tax returns as potentially fraudulent as of March 2, according to a Treasury report issued to the public Tuesday that analyzed data partway through the filing season. The associated refunds were worth about $6.3 billion.
    The IRS had confirmed 12,617 of the tax returns were fraudulent as of the same date in March, Treasury reported. That figure is up from 9,626 tax returns at the same time in 2022.
    More from Personal Finance:Black taxpayers more likely to face audits, IRS confirmsSocial Security, federal salaries at risk in debt ceiling standoffTurboTax payments for $141 million settlement set to begin
    Tax-related identity theft has been a problem since about 2004-05, and it “only got worse” since then, said Nina Olson, executive director and founder of the Center for Taxpayer Rights.
    “It went from being a one-off [thief] ripping off someone’s Social Security number to a whole scheme and organized crime,” Olson said.

    Identity theft was the most prevalent type of fraud that consumers reported to the Federal Trade Commission in 2022. A separate report issued last year by the Identity Theft Resource Center suggested that identity crime jumped to an all-time high in 2021.
    The IRS increased the number of filters it uses to identify potentially fraudulent tax returns since the 2022 tax season. The agency used 236 filters during the recent tax season, compared with 168 filters last year, Treasury said.

    Tax returns identified as fraudulent by these IRS filters are held during processing until the IRS can verify the taxpayer’s identity.
    “They’re trying to crack down … to make sure you’re [the one] actually filing,” said Dan Herron, a certified public accountant and certified financial planner based in San Luis Obispo, California.
    Sometimes, the system inadvertently catches returns that aren’t fraudulent, though.
    One of Herron’s new clients had been filing a paper tax return every year with a different accountant but filed an electronic return in 2023. The client received an IRS notice in the mail saying that the return had been flagged for fraud. The client had to contact the agency to verify their identity — delaying the issuance of a tax refund by several weeks, Herron said.
    “It’s not a perfect system, but it’s going in the right direction,” Herron, founder of Elemental Wealth Advisors, said of the IRS systems.

    How to protect yourself from tax-related identity theft

    Imelenchon | Istock | Getty Images

    Taxpayers may not know they’re the victim of tax-related identity theft until they try to file a return online and learn that a return was already filed using their Social Security number. The IRS may also send a letter saying it identified a suspicious return using your SSN, for example, among other telltale signs.
    Taxpayers can still claim a refund if this happens. But they’ll have to take additional steps to prove their identity to the IRS, and their refund will likely be delayed as a result.
    Perhaps the best way for taxpayers to prevent identity theft is to request an Identity Protection Personal Identification Number (IP PIN) directly from the IRS, Olson said.  
    The IP PIN is a six-digit number assigned to eligible taxpayers at the start of each filing season. It’s known only to the taxpayer and, once issued, is needed when filing a tax return as an authentication measure.

    A tax return filed by a scammer without the associated IP PIN would not be processed, Olson said. She recommends taxpayers who want an IP PIN request one in the latter part of the calendar year, ahead of the tax season, and that they keep it handy.
    The IRS issued 802,449 total IP PINs to taxpayers as of March 4, according to the Treasury’s report.
    Taxpayers can also reduce their risk by trying to file a return early in the tax season, experts said. The IRS also recommends several online security measures tied to computers and mobile phones, digital passwords, multifactor authentication and avoiding suspicious e-mail links or attachments.
    The IRS also never initiates contact with taxpayers by e-mail, text or social media to request personal or financial information, and never calls to threaten lawsuits or arrest, the agency said.

    What to do if you’re a victim of tax ID theft

    The IRS recommends victims of tax-related identity theft take a few important steps:

    Complete IRS Form 14039, Identity Theft Affidavit, if your e-file return is rejected because of a duplicate filing using your Social Security number. Continue to pay your taxes and file your tax return, even if it must be by paper. Attach the identity theft form to your paper return.
    Respond immediately to any IRS notice.
    File a complaint with the FTC at identitytheft.gov.
    Contact one of the three major credit bureaus (Equifax, Experian or TransUnion) to place a fraud alert on your credit records.
    Close any financial or credit accounts opened by thieves. More

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    Tether buys $222 million worth of bitcoin to back its USDT stablecoin

    Tether said it would invest 15% of its net profit into bitcoin to “diversify” the reserves that back its USDT token, which aims to stick to a 1-to-1 peg to the U.S. dollar.
    That would amount to roughly $222 million, based on the company’s last attestation report, which provides a breakdown of the assets that make up its USDT reserves.
    USDT is the largest stablecoin in the market, with a circulating supply of more than $82.8 billion, according to CoinGecko data.

    Paolo Ardoino, Tether’s chief technology officer, said the company estimates that the excess reserve will increase by $700 million in the current quarter, which is not yet over.
    Justin Tallis | Afp | Getty Images

    Cryptocurrency giant Tether on Wednesday said that it’s going to purchase hundreds of millions of dollars’ worth of bitcoin to back the world’s largest stablecoin.
    The company said it would invest 15% of its net profit into bitcoin to “diversify” the reserves that back its USDT token, which aims to stick to a 1-to-1 peg to the U.S. dollar.

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    That would amount to roughly $222 million, based on the company’s last attestation report, which provides a breakdown of the assets that make up its USDT reserves.
    Tether began revealing it was making gains from its USDT operation in February, declaring a net profit of $1.48 billion in March and taking its total excess USDT reserves to $2.44 billion.
    USDT is the largest stablecoin in the market, with a circulating supply of more than $82.8 billion, according to CoinGecko data. It competes with Circle’s USD Coin and Binance’s BUSD.
    Stablecoins are used by traders to move in and out of different cryptocurrencies without converting money back into fiat currencies.
    “The decision to invest in Bitcoin, the world’s first and largest cryptocurrency, is underpinned by its strength and potential as an investment asset,” Tether CTO Paolo Ardoino said in a statement.

    “Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential. Its limited supply, decentralized nature, and widespread adoption have positioned Bitcoin as a favored choice among institutional and retail investors alike.”
    The move would make Tether a major bitcoin holder, following moves from multiple notable investors like Paul Tudor Jones and MicroStrategy boss Michael Saylor to accumulate huge stockpiles, in the belief that the token is immune to the effects of currency depreciation and inflation.
    Analysts and investors have previously told CNBC that bitcoin could get a boost this year due to the influence of so-called “whales” — market players with significant financial firepower, which enables them to buy up huge sums of tokens.
    Tether’s methods to maintain a $1 value for its token have drawn controversy in the past because of concerns over the quality of its reserve assets. Previously, the company held a great deal of its reserves in commercial paper — a form of short-term, unsecured debt issued by companies. This is seen as less safer than other forms of debt, such as U.S. Treasury bills.
    Tether sought to allay investor fears by rotating out of commercial paper and replacing these fund holdings with only U.S. government debt securities.
    In February, the company said it had whittled down its commercial paper holdings to zero.
    USDT and its issuer remain a source of contention in the crypto market. The U.S. Department of Justice is reportedly investigating executives at Tether over possible bank fraud.
    Stablecoins were already a hot-button issue for regulators, who have been scrambling to figure out how to keep the industry in check after the demise of several notable firms in the space. More

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    Target tops earnings expectations, even as sales barely budge and consumers watch spending

    Target’s sales barely grew year over year and comparable sales were flat in the fiscal first quarter.
    Consumers are buying more necessities, as they watch their budgets.
    The retailer stuck with its previous full-year guidance.

    Shopping carts outside a Target store in the Queens borough of New York, US, on Saturday, May 13, 2023. Target Corp. is scheduled to release earnings figures on May 17. 
    Bing Guan | Bloomberg | Getty Images

    Target on Wednesday topped Wall Street’s earnings expectations, even as the discounter’s sales barely grew year over year and its shoppers bought more necessities.
    The company’s shares were choppy in premarket trading as investors processed the report and the company’s second-quarter guidance. Target said it expects sales to remain sluggish in the current quarter, marked by a low-single-digit decrease in comparable sales.

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    The big-box retailer stuck with its full-year outlook. It expects comparable sales will range from a low-single-digit decline to a low-single-digit increase for the fiscal year. Target said its full-year earnings per share will range between $7.75 and $8.75. 
    Even as customers buy fewer discretionary items, Target is drawing them to stores with groceries, everyday essentials and on-trend items, CEO Brian Cornell said on a call with reporters. 
    Here’s what Target reported for the three-month period that ended April 29, compared with Refinitiv consensus estimates:

    Earnings per share: $2.05 vs. $1.76 expected
    Revenue: $25.32 billion vs. $25.29 billion

    Target’s net income for the fiscal first quarter dropped to $950 million, or $2.05 per share, from $1.01 billion, or $2.16 per share, a year earlier.  
    Total revenue rose nearly 1% from $25.17 billion a year ago, coming in just above analysts’ expectations. 

    Comparable sales, a key retail metric that tracks sales at stores open at least 13 months and online, were about flat in the first quarter compared with the year-ago period. That was about in line with Wall Street’s expectations of 0.2% growth, according to Street Account estimates.
    Shoppers spent less as the quarter went on, Chief Growth Officer Christina Hennington said on a call with investors. Sales were strongest in February, weakened in March and softened further close to the end of April, she said.
    Beauty was the strongest category, with sales growing in the mid-teens year over year. Food and beverage grew in the high single-digits. And household essentials sales rose by low single-digits, as customers bought health and pet items.
    Other categories that include more discretionary items, including apparel and home, posted sales declines that ranged from mid single-digits to low double-digits, Hennington said. She added that when customers did buy those items, they tended to get them last minute, such as right before a holiday.
    As customers bought different items, they shopped differently, too. Comparable store sales grew 0.7%, but comparable digital sales declined by 3.4% versus the year-ago period.
    Cornell said a decrease in packages shipped to homes in part drove the weaker digital sales. Those deliveries skew toward discretionary items, compared with Target’s same-day curbside pickup orders, which tend to include more everyday needs like food or diapers, he said.
    At Target’s stores and online, shopper traffic grew roughly 1%, on top of 3.9% growth in the year-ago period.
    Target has had a challenging year of squeezed profits and softening demand, after a surge of growth during the Covid pandemic. Its annual revenue jumped by about $31 billion – or nearly 40% – from the fiscal year that ended in January 2020 to the fiscal year that ended this January.
    In the year-ago quarter, the discounter’s troubles gained steam as it coped with higher freight costs and popular pandemic purchases like bicycles and kitchenware lingered on shelves. The retailer’s stock fell, as it missed Wall Street’s earnings expectations three quarters in a row.
    After Target canceled orders and cleared through the inventory glut, another storm cloud appeared: shoppers had become more frugal.
    Target on Wednesday showed signs of getting its inventory and profits back on track. Its fiscal first-quarter earnings beat expectations and its gross margin rate of 26.3% rose from a year ago, as freight costs fell and the retailer had fewer markdowns.
    Yet its operating margin rate still has not climbed back to pre-pandemic levels. That won’t happen until next fiscal year or later, the company said in February.
    Inventory dropped 16% year over year at the end of the quarter, driven by a 25% reduction in discretionary merchandise categories. The company has been ordering more food and high-frequency items to better mirror customers’ spending shift.
    Other retailers have noticed a change in shoppers’ purchases, too. On Tuesday, Home Depot missed revenue expectations and lowered its forecast. The company’s CFO, Richard McPhail, said customers are buying fewer big-ticket items and taking on smaller projects. Plus, he added, they are spending again on services and already bought many items they needed when stuck at home due to Covid concerns. 
    Target’s Cornell called out another challenge for retailers: organized retail theft. He said Target expects shrink will reduce the retailer’s profitability by more than half a billion dollars compared with last year. 
     “The unfortunate fact is violent incidents are increasing at our stores and across the entire retail industry,” he said on the call with reporters. 
    He added the trend hurts the shopping experience by leaving shelves half-full for customers and employees rattled.
    While Target reported a better-than-expected quarter Wednesday, executives stressed that strain on U.S. households will leave it facing challenges for the near future.
    “The consumer is under pressure,” Hennington said on the call with reporters. “The consistent inflation, the running out of savings as well as just economic uncertainty in general is having an impact on their choices and they’re making trade-offs.”
    Yet she said Target is getting them to open their wallets by dangling holiday-themed items, new products and lower prices. It’s gotten a pop in sales from food, decor and gifts during Valentine’s Day and Easter, from movie-themed toys and fresh collections of women’s dresses. More

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    Cryptos have no intrinsic value and trading in them should be regulated like gambling, UK lawmakers say

    Unbacked tokens like bitcoin and ether aren’t underpinned by underlying assets and have “no intrinsic value,” while trading in them should be regulated like gambling, U.K. lawmakers said in a report.
    A U.K. Parliament committee said it was concerned by government proposals to regulate consumer trading of crypto as a financial service.
    In February, the government laid out plans to regulate crypto assets, which could pave the path for trading platforms and other firms to get licenses to operate in the country.

    Bitcoin, the world’s largest cryptocurrency, has been stealthily rising in 2023.
    Chris Ratcliffe | Bloomberg | Getty Images

    Trading in cryptocurrencies is akin to gambling and should be treated as such, British lawmakers said.
    Unbacked tokens like bitcoin and ether aren’t underpinned by underlying assets and have “no intrinsic value,” lawmakers on the U.K. Treasury Select Committee said in a report published Tuesday.

    With a combined market capitalization of $737.7 billion, bitcoin and ether alone account for two thirds of all cryptocurrencies.
    The events of the past year in the crypto industry — from the downfall of crypto exchange FTX to the decline of stablecoin experiment Terra — have drawn heightened scrutiny from regulators, who are concerned by negative effects on consumers.
    In its Tuesday report, the Treasury Select Committee said the heightened volatility and potential to lose huge sums of money mean that cryptocurrencies pose significant risks to consumers, the committee said.
    “Given retail trading in unbacked crypto more closely resembles gambling than a financial service, the MPs call on the Government to regulate it as such,” the lawmakers said.
    “The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west,” Harriett Baldwin, chair of the Treasury Select Committee, said Tuesday. “Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK’s financial services industry,’ she added.

    “However, with no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like Bitcoin more closely resembles gambling than a financial service, and should be regulated as such. By betting on these unbacked ‘tokens’, consumers should be aware that all their money could be lost.”
    Around 10% of U.K. adults hold or have held cryptocurrencies, according to British tax agency HM Revenue & Customs.
    The Treasury committee said it was concerned by government proposals to regulate consumer crypto trading as a financial service. This, lawmakers said, would create a “halo” effect that leads people to believe crypto trading is safe and protected, when this is not the case.
    In February, the government laid out plans to regulate crypto assets and opened its suggestions up for a consultation whose window closed on Apr. 30.
    Such a regulatory framework would potentially allow crypto firms to apply for bespoke licenses to operate in the U.K — historically, a major point of contention for U.K. firms. The Financial Conduct Authority, which is the de facto regulator for crypto firms under the country’s money laundering regime, has set a high bar for approval of crypto licenses.
    Blair Halliday, U.K. managing director for top U.S. crypto exchange Kraken, said: “We fundamentally disagree with the Treasury Select Committee’s conclusion that cryptoassets have no intrinsic value. It’s regrettable the committee does not support the opportunity the UK has to be a true global leader in our rapidly developing industry.”
    “We strongly believe the U.K. Government and FCA are on the right path to developing proportionate regulations which support innovation whilst establishing necessary guardrails and customer protections,” Halliday added. “Kraken will continue to collaborate with legislators to help achieve these goals.”
    In April, a top U.K. government official told CNBC that he expected to see specific regulation for crypto in the U.K. in the next 12 months.
    WATCH: Three decades after inventing the web, Tim Berners-Lee has some ideas on how to fix it More

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    Stocks making the biggest premarket moves: Western Alliance, TJX, Wynn, Tesla & more

    Signage outside Western Alliance Bank headquarters in Phoenix, Arizona on March 13, 2023.
    Caitlin O’Hara | Bloomberg | Getty Images

    Check out the companies making the biggest moves in premarket trading:
    Western Alliance — Shares popped 12% premarket after Western Alliance said its deposit growth for the current quarter exceeded $2 billion as of May 12, up from the $1.8 billion in deposit growth for the quarter through May 9.

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    TJX Companies — Shares fell about 1% after the retailer reported a revenue miss before the market open. First-quarter revenue came in at $11.78 billion, less than the $11.82 billion expected from analysts polled by Refinitiv. TJX also guided for second-quarter earnings per share of 72 cents to 75 cents, versus the 79 cents anticipated by analysts. Full-year guidance also fell short of estimates, even as first-quarter EPS topped estimates.
    Target — The big-box retailer’s stock was down less than 1% in volatile trading as the company surpassed earnings expectations in the fiscal first quarter, even as sales barely grew year-over-year. Target also said it expects sales to remain sluggish in the current quarter, marked by a single digit decrease in comparable sales. The retailer stuck with its previous full-year guidance.
    Zions Bancorporation — The Salt Lake City-based bank added 4.7% as regional banks moved higher in premarket trading, led by Western Alliance. The SPDR S&P Regional Banking ETF was up 1.7%.
    Keysight Technologies — Shares soared 7.8% following an earnings beat after the bell Tuesday. The tech company reported adjusted earnings per share of $2.12 for its fiscal second quarter, topping the $1.95 expected by analysts, per StreetAccount. It guided for between $2.00 and $2.06 EPS for the current quarter, above analysts’ forecast of $1.96.
    Tesla — Shares rose 1.5% Wednesday premarket. The company held its annual shareholder meeting Tuesday, during which CEO Elon Musk announced the company would deliver its first Cybertrucks later this year and would start to advertise.

    Wynn Resorts — The casino operator added 2.7% after an upgrade to overweight from equal weight at Barclays. The Wall Street firm cited the continuing recovery in Wynn’s Macao properties and boosted its price target to $135 from $120, suggesting 31% upside from Tuesday’s close.
    EVgo — Shares sank nearly 9% premarket following the EV charging network operator’s announcement late Tuesday of a $125 million offering of its common stock. JPMorgan, Evercore and Goldman Sachs are underwriting the offering.
    Doximity — The medical software stock dropped nearly 10% premarket, one day after the company issued weak guidance for the current quarter. Doximity said it expects between $106.5 million and $107.5 million in revenue for the fiscal first quarter, less than the $111.8 million anticipated by analysts polled by FactSet. It guided for $40 million in adjusted EBITDA, below the $45.4 million expected.
    — CNBC’s Yun Li and Hakyung Kim contributed reporting. More

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    Crypto firm Ripple buys Swiss startup as SEC crackdown forces companies to consider overseas moves

    Blockchain firm Ripple has acquired Metaco, a Swiss crypto custody services firm, the company announced Wednesday.
    The deal is expected to bolster Ripple’s product suite and give it access to an attractive roster of clients that includes Citi and BNP Paribas.
    It will also help the company increase its presence overseas at a time when it is fighting a lawsuit from the Securities and Exchange Commission.

    Ripple CEO Brad Garlinghouse speaks during the Milken Institute Global Conference in Beverly Hills, California, on Oct. 19, 2021.
    Kyle Grillot | Bloomberg | Getty Images

    Blockchain firm Ripple said Wednesday it has acquired Metaco, a Swiss firm that holds digital assets securely on behalf of clients, in a bid to expand its international footprint and broaden its range of services.
    News of the deal, one of the largest acquisitions in the crypto industry in the past year or so, comes as the San Francisco-based startup continues to contest a lawsuit from the United States Securities and Exchange Commission.

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    It also comes as the crypto industry as a whole is facing a host of challenges, from higher interest rates and tighter funding conditions to mass layoffs and dwindling company valuations.
    “This is the largest deal we’ve seen in the last year,” Brad Garlinghouse, CEO of Ripple, told CNBC on a call Tuesday.
    Ripple invested $250 million of cash off its own balance sheet to fund the acquisition, Garlinghouse said.
    “At a time when others are closing their doors or facing layoffs, I think it’s a real important signal for the industry, it’s also a signal that ripple’s in a strong position — we’re going to play offense,” he added.
    Ripple’s boss said the deal was a sign that it was still possible to make sizable deals even with the pressures the broader market is facing.

    From crypto winter to crypto spring?

    Garlinghouse said the deal would help the company increase its presence overseas at a time when the Securities and Exchange Commission is taking tough actions against major industry players — Ripple included.
    The crypto titan, valued at $15 billion in its most recent private round of financing, has been faced with a great deal of regulatory uncertainty after the SEC sued the company and two of its executives accusing them of unregistered securities.
    The regulator’s main assertion is that XRP, a cryptocurrency Ripple is closely associated with, is akin to a security which should have been registered with the agency before being issued and sold to investors.
    Ripple, for its part, denies XRP should be treated as a security.
    Founded in 2015 in Switzerland, Metaco offers a range of services aimed at helping financial institutions store, trade, issue and manage digital currencies in a secure manner.
    “We’ve been partnering with that segment — banks, payment providers, in our whole history,” Garlinghouse said, adding Metaco is “a good fit in terms of the strategic opportunity.”
    “There’s a lot of deals people have tried to do during this crypto winter — I think this will really be a mark of a crypto spring.”
    Secure custody of crypto in segregated accounts has become a heightened priority for financial institutions seeking to make a play in the industry in the wake of the collapse of FTX and numerous other notable crypto platforms.
    Metaco counts several major financial firms as clients including Citi, BNP Paribas, BBVA and Societe Generale.

    SEC lawsuit outcome expected in ‘months’

    Crypto companies have been playing a game of poker with the U.S. SEC, making bold threats to leave the country following tough enforcement actions from the agency.
    Major players are hoping the SEC and Washington takes, what crypto watchers see as bluffs, seriously and soften the hard line that regulators have taken on the industry.
    Garlinghouse said last week that the firm will have spent $200 million in total defending itself against the SEC lawsuit.
    The company’s legal battle with the U.S. agency is expected to draw to a close sometime later this year.
    In an interview with CNBC Tuesday ahead of the news, Garlinghouse said he expects the firm will get an outcome in the legal fight in a matter of months.
    “I think the most likely scenario is that we’ll hear [a decision] sometime either two to four or five months from now,” Garlinghouse said.
    Gary Gensler, chair of the SEC, has made clear the regulator has no intention of backing down from its aggressive enforcement actions in the crypto space. Gensler has insisted that existing securities laws are already a good fit for crypto.
    Some industry executives, however, believe the regulator’s actions are misguided. Numerous crypto industry insiders have been calling for a clear regulatory framework from the U.S. Congress to help give companies clarity over how they can operate in a way that’s legally sound.
    Ripple is now Metaco’s sole shareholder, the company said. Metaco will continue to remain independent and its CEO Adrien Treccani will stay on as CEO.
    “This deal will enable Metaco to leverage Ripple’s scale and market strength to reach our goals and deliver value to our clients at a faster pace,” Treccani said in a statement Wednesday.
    “We look forward to continuing to serve unprecedented levels of institutional demand with the utmost excellence in delivery, as our clients have come to expect.”
    WATCH: Ripple will have spent $200 million fighting SEC lawsuit, CEO says More

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    JPMorgan and Barclays back $4.5 billion insurance tech giant Wefox

    Wefox, a Berlin, Germany-based insurance technology startup, announced Wednesday that it has raised $110 million from investors.
    Of that sum, $55 million came in the form of a revolving credit facility from JPMorgan and Barclays.
    The remaining $55 million was an equity investment led by investment management firm Squarepoint Capital.
    Wefox maintained its $4.5 billion valuation from its previous round of funding, the company said.

    Wefox CEO Julian Teicke.

    German digital insurer Wefox said Wednesday it raised $110 million of fresh funding from backers including JPMorgan and Barclays.
    The news marks a vote of confidence for the insurance technology space at a time when it faces tough macroeconomic headwinds.

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    Wefox is a Berlin, Germany-based firm focused on personal insurance products, such as home insurance, motor insurance and personal liability insurance. Rather than underwriting claims itself, the company connects its users with brokers and partner insurance firms through an online platform.
    Founded in 2015, it competes with the likes of U.S. digital insurer Lemonade and German firm GetSafe, as well as established insurance incumbents like Allianz.
    Wefox said it raised the fresh funds through a combination of debt financing and fresh equity. Of the $110 million total, $55 million is in the form of a credit facility from banking giants JPMorgan and Barclays. A further of $55 million equity investment was led by Squarepoint Capital, a global investment management firm with $75.7 billion in assets under management.
    “It’s a new type of financing for a growth company,” Julian Teicke, Wefox’s CEO and co-founder, told CNBC in an interview. “Risk investors, equity investors, they understand, they want to take risk.”
    “Banks typically don’t, so for them it was really important to understand our path towards profitability and the maturity of our business,” he added.

    The company said it maintained its $4.5 billion valuation from a July funding round — somewhat rare in today’s market, with many fintechs seeing their valuations slump drastically.
    Wefox’s announcement comes as fintech and the technology industry as a whole grapple with a harsher economic environment, finding it more difficult to raise funding.
    Higher interest rates have seen investors reevaluate growth-oriented tech businesses, with equity markets — and fintech in particular — taking a beating. In the public markets, U.S. firm Lemonade has seen its shares drop 23% in the past 12 months, though the stock is up 13% so far in 2023.
    Layoffs have also plagued the fintech space. On Tuesday, money transfer firm Zepz told CNBC it was letting 420 employees go, or 26% of its total workforce, in the latest round of redundancies to hit the sector.
    The collapse of Silicon Valley Bank, too, has darkened the outlook. The tech-focused lender collapsed earlier this year after its startup and venture capital clients fled in a panic due to capitalization concerns.
    Despite the headwinds facing the wider tech industry, Teicke says he believes Wefox is “crisis-resistant.” In the first quarter of 2023, Wefox saw its revenues almost double year-over-year. The company anticipates it will reach profitability by the end of this year.
    Teicke also said Wefox hasn’t faced the same pressures to lay off staff. Instead, it has shifted its priorities, he said, “doubling down on things that work and stopping things that don’t make sense.”
    For instance, Teicke said Wefox was focusing on its broker partnership model and its so-called “affinity” method of distribution, where it sells its insurance software to other businesses for a subscription fee — for example, an online car dealer adding car insurance at the point of sale.
    The fresh funds will go towards investing in Wefox’s affinity program and technology platform, the company said.
    Teicke said Wefox is also investing heavily in artificial intelligence, which has become a hot area of tech recently following the rise of viral AI chatbot ChatGPT. Wefox mainly uses AI to automate policy applications and customer service.
    The company has three tech hubs in Paris, Barcelona, and Milan dedicated to AI. More