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Ripple seeing ‘good progress’ in SEC case over XRP cryptocurrency

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In this photo illustration of the ripple cryptocurrency ‘altcoin’ sits arranged for a photograph on April 25, 2018 in London, England. 

Jack Taylor | Getty Images News | Getty Images

Fintech company Ripple is making great strides in its legal feud with the U.S. Securities and Exchange Commission, CEO Brad Garlinghouse told CNBC on Monday.

Garlinghouse said he expects the case, which centers on XRP, the world’s seventh-biggest cryptocurrency, will likely reach a conclusion next year.

“We’re seeing pretty good progress despite a slow-moving judicial process,” he told CNBC’s Dan Murphy.

“Clearly we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.”

Garlinghouse said he was hopeful there would be closure next year.

Ripple, which is based in San Francisco, generated a lot of buzz during the crypto frenzy of late 2017 and 2018, which saw the prices of bitcoin, ether and other cryptocurrencies skyrocket to record highs.

XRP, a token Ripple is closely associated with, benefited from that rally, hitting an all-time high above $3. It’s since declined dramatically from that price but is riding the latest crypto wave with a more than 370% gain year-to-date

Ripple’s technology is designed to let banks and other financial services firms send money across borders faster and at a lower cost. The company also markets another product that utilizes XRP for cross-border payments called On-Demand Liquidity.

The SEC is concerned about Ripple’s ties to XRP, alleging the company and its executives sold $1.3 billion worth of the tokens in an unregistered securities offering. But Ripple contends that XRP should not be considered a security, a classification that would bring it under much more regulatory scrutiny.

It comes as regulators around the world are taking a closer look at crypto, a market that is still largely unregulated but has boomed in the last year.

Garlinghouse said the United Arab Emirates, Japan, Singapore and Switzerland were examples of countries showing “leadership” when it comes to regulating crypto, while China and India have cracked down on the industry.

“In general, the direction of travel is very positive,” Garlinghouse said.

Brady Dougan, the former CEO of Credit Suisse, said regulation is a key area in crypto that’s likely to develop over time.

“It’s a market that’s early in its development,” Dougan, who now runs fintech firm Exos, told CNBC. “I think it’s a healthy market and it’s one that will continue to develop in a positive way.”

Ripple, a privately-held company, was last valued at $10 billion and counts the likes of Alphabet’s venture capital arm GV, Andreessen Horowitz and Japan’s SBI Holdings as investors.

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NetEase’s launches $500 million Hong Kong IPO for its music business

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Cloud Village, the music streaming arm of NetEase runs the NetEase Cloud Music app which is displayed on a smartphone in this photo.

Fan Jianlei | Visual China Group | Getty Images

GUANGZHOU, China — NetEase has launched the Hong Kong initial public offering (IPO) of its music business Cloud Village which could raise around $500 million.

Cloud Village will offer 16 million shares at a price between 190 Hong Kong dollars and 220 Hong Kong dollars. The final price has not yet been set.

There is an option to issue a further 2.4 million shares as part of an over-allotment option.

At the upper end of the range, Cloud Village would raise around 4.04 billion Hong Kong dollars ($519.6 million), not excluding fees and other expenses related to the IPO.

Cloud Village runs NetEase’s music streaming business and the company says it has 185 million monthly active users. Its revenue rose 51.5% year-on-year to 5.1 billion yuan ($799.6 million) for the nine months ended Sept. 30 but it is still suffering heavy losses as it competes for market share against Tencent’s music streaming business.

The company’s revenue comes mainly from subscriptions, advertising and when users buy virtual items on its platforms.

NetEase originally filed for the listing of Cloud Village in August but reportedly delayed the IPO due to volatile markets.

Over the past year, the Chinese technology sector has been facing a tightening regulatory environment in areas from antitrust to data protection, which has hurt the share prices of many of the country’s giants.

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Thai firm branches into EVs from renewable energy

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Many people expect electric vehicles to be fixtures in a future world that relies on renewable energy. But not many EV companies started out as renewable energy companies.

One company trying to pull off that feat is Bangkok-based Energy Absolute. The biodiesel producer and renewable energy company branched into the commercial EV business in 2019.

In March of this year, Thailand set a goal of 1 million electric vehicles on its roads by 2025 — and it hopes that figure will grow to 15 million a decade later. That would include not just private automobiles but commercial vehicles — delivery vans, trucks, buses and the like.

A former securities trader, Somphote Ahunai, started Energy Absolute in 2006. He took the company public in Thailand in 2013 and began expanding into energy storage in 2016, when the company acquired shares in Taiwan-based Amita Technologies, an energy storage manufacturer. It’s now in the final stages of building a $3 billion battery gigafactory project to make lithium-ion batteries.

Ahunai told CNBC’s “Managing Asia” that the government’s efforts to promote EV adoption in Thailand have helped him to start the project, and now he says he’s urging the government “to open up the market and create a favorable policy for the EV market.”

However, the pandemic has affected the company’s foray into EVs. An order for 3,500 five-seater hatchbacks was canceled by a local taxi company as tourism dried up. Ahunai made a quick pivot to focus on commercial vehicles and battery storage instead.

“Many manufacturers, they are focusing on the passenger car. Not many people are focusing on the commercial vehicle yet, because they cannot overcome how to make the vehicle charge faster and make the battery last longer,” Ahunai said.

Ahunai’s plan is to install 1,000 charging stations nationwide in the next few years.

A charging sign sits at an Energy Absolute Anywhere charging station in Bangkok, Thailand, 2019.

Nicolas Axelrod | Bloomberg | Getty Images

“We have rolled out almost 500 charging stations nationwide, mainly in Bangkok and vicinity,” Ahunai said, adding that the company holds almost 80% market share for charging stations in Thailand.

His focus on commercial vehicles is in line with Thailand’s policy to put some 70,000 commercial electric vehicles on the road annually.

Read more about electric vehicles from CNBC Pro

“If we successfully secure [the commercial electric vehicle] segment … then we create economies of scale for us to go into the other segments,” such as passenger cars, Ahunai said.

Japanese, American and German automakers all have manufactured vehicles in Thailand, but despite the country’s auto-making expertise, it doesn’t have an internationally recognized vehicle brand of its own. Ahunai said he believes EVs could change that. He wants Energy Absolute to be front and center on that effort.

“We believe that by using [our] technology and Thailand’s [auto-making] infrastructure, we can use that to be the springboard to the global market,” Ahunai said. “At least, we can go into the ASEAN market, which has almost 600 million population. So, that is a good market for us at the beginning, to start with.”

Right now, the bulk of the company’s revenue still comes from renewable energy such as wind and solar, but Ahunai said his foray into commercial EVs will be an important source of future revenue.

“If you look at what we are investing [in] now,” he said, “it will totally change the revenue structure of the company in a few years’ time.”

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Breakthrough Covid infections are more common than people realize

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Anyone who received a Covid vaccine in the earliest stages of the rollout should register for their booster shots because “there’s probably more infection happening among the vaccinated population” than the U.S. is currently monitoring, Pfizer board member Dr. Scott Gottlieb told CNBC’s “Squawk Box” on Monday.

The effectiveness of Covid vaccines is proven to diminish over time, and Gottlieb said breakthrough infections are likely to occur in individuals almost a year removed from becoming fully immunized. But boosters offer an “almost immediate” effect of restoring the antibody protection offered by vaccines to their original levels, the former Food and Drug Administration commissioner noted.

“At this point I think we need to accept that there’s a lot of breakthrough infections happening, particularly people who are out a significant portion of time from their original vaccination,” Gottlieb said. “There’s probably more infection happening among the vaccinated population, more spread happening in that population, the unboosted portion of that population, than what we’re picking up because we’re just not systematically tracking this.”

“There’s going to be retrospective studies that identify this, but we’re not doing a good job of tracking this in real time. And this is the argument for people to go out and get boosters,” Gottlieb said.

Gottlieb urged vaccinated Americans to get boosted before gathering for Thanksgiving, advising that those who receive an extra dose in the days ahead could still “have substantially more protection” in time for the holiday. He called on parents to bring unvaccinated kids for their shots before the holidays as well, adding that children gain a greater shield against Covid from their first dose than adults.

The Centers for Disease Control and Prevention cleared the way on Friday for all U.S. adults inoculated with Pfizer or Moderna’s two-dose Covid vaccines to get boosted at least six months after receiving their second shot. The agency previously approved boosters for any Johnson & Johnson vaccine recipient ages 18 and older, though they’re eligible two months after getting the one-dose Covid shot.

Gottlieb’s comments come as the U.S. reports a rise in Covid cases following weeks of declines and a nearly three-week plateau that started in late October and saw cases level off between 70,000 and 75,000 per day. The country’s seven-day new case average reached almost 92,400 on Sunday, up 16% from a week ago, according to a CNBC analysis of data from Johns Hopkins University.

Covid cases were also up 6% globally as of the week ended Nov. 14, the World Health Organization reported in its most recent weekly epidemiological update. Europe recorded more than 2.1 million new cases over that week, representing some 64% of the total cases worldwide, the WHO measured.

Germany reported a seven-day average of over 49,200 new cases on Sunday, almost a 31% increase from the week prior, Hopkins found. Pockets of inadequate vaccination rates and a lower degree of prior infection than the U.S. are helping to fuel Germany’s surge of the highly transmissible delta variant, Gottlieb said.

“When you look at the total immunity in the German population, it probably is lower than in the U.S.,” Gottlieb said. “I’m not saying that we’re impervious to spread here – we’ve certainly seen dense outbreaks of delta in specific parts of this country.”

“But I think we’re in a certain different situation than Germany right now because we’ve endured a lot of prior waves of infection, and Germany has controlled the infection to a better extent in the prior waves,” he continued. “Now, the delta strain is getting out of control there.”

German Chancellor Angela Merkel has called for the country’s 16 states to decide on tough steps to control the spread by Wednesday, telling members of her conservative party that the current measures are insufficient, according to Reuters. Germany has restricted public life in areas where hospitals are becoming full to people who are vaccinated or who have recovered from the virus.

Austria, Germany’s neighbor to the south, imposed a full lockdown on Monday and is implementing a nationwide vaccine mandate starting Feb. 1.

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