Coinbase Must Face Customer Lawsuit in New York Court

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Coinbase must defend itself in a lawsuit filed by customers who claim that the company illegally sold securities without registering as a broker-dealer, a federal judge ruled on Friday. U.S. District Judge Paul Engelmayer in Manhattan dismissed Coinbase’s argument that it was not a “statutory seller” under federal securities laws because it did not transfer title to the 79 tokens customers traded.

Judge Engelmayer referenced the accusation that Coinbase facilitates transactions solely between itself and the customers, which led to the conclusion that the exchange was acting as a seller. He also rejected the dismissal of claims under the laws of California, Florida, and New Jersey, agreeing that customers adequately argued that Coinbase was a direct seller of the tokens.

Coinbase has consistently stated it does not list, offer, or sell securities on its platform. The company expressed its intent to defend itself against the remaining claims in court. Customer lawyers did not immediately comment on the ruling.

This ruling comes after the 2nd U.S. Circuit Court of Appeals revived parts of the lawsuit in April 2023, which had initially been dismissed by Engelmayer in February of the same year. Customers are seeking unspecified damages.

In addition to the private lawsuit, the U.S. Securities and Exchange Commission (SEC) is also suing Coinbase, alleging the exchange allowed the trading of tokens that should have been registered as securities. Last month, a separate federal judge temporarily paused the SEC’s case to allow Coinbase to seek clarification from the 2nd Circuit on whether digital token trades fall under the definition of investment contracts.

OpenAI Co-founder Sutskever’s Startup SSI in Talks for $20 Billion Valuation

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Safe Superintelligence (SSI), a startup co-founded by OpenAI’s former chief scientist Ilya Sutskever, is reportedly in discussions to raise funding at a valuation of $20 billion. This would mark a significant increase from its previous $5 billion valuation during a September funding round, where it raised $1 billion from investors like Sequoia Capital, Andreessen Horowitz, and DST Global.

SSI’s talks come at a time when high-profile AI ventures are facing a reappraisal of their valuations following Chinese startup DeepSeek’s release of a cost-effective AI model. Despite not yet generating any revenue, SSI’s mission is to develop “safe superintelligence” that is both smarter than humans and aligned with human interests. However, much of the company’s work and approach remains under wraps, fueling intrigue among investors.

The company’s founders include Daniel Gross, previously of Apple, and Daniel Levy, a former OpenAI researcher. While SSI’s approach to AI is still not widely known, Sutskever’s reputation for groundbreaking work in AI, particularly in scaling and inference techniques, has garnered significant attention. SSI’s focus on “scaling in peace” aims to insulate progress from short-term commercial pressures, a stark contrast to the trajectory of OpenAI, which shifted to commercial products after the success of ChatGPT in 2022.

The conversation around SSI’s valuation highlights the ongoing competition in the AI space, with OpenAI in talks to potentially double its valuation to $300 billion, and rival Anthropic nearing a funding round that would value it at $60 billion.

to Implement Layoffs While Expediting AI Engineer Hiring

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Meta Platforms, the parent company of Facebook, is preparing for company-wide layoffs next Monday, as indicated in internal memos reviewed by Reuters. The layoffs, affecting around 5% of employees deemed “lowest performers,” will begin at 5 a.m. local time in many regions, including the U.S. However, workers in Germany, France, Italy, and the Netherlands will be exempt from the cuts due to local regulations. Notifications for employees in other countries, including those across Europe, Asia, and Africa, will be issued between February 11 and February 18.

Meta has confirmed that it intends to backfill some of the positions lost during the layoffs, particularly in critical areas such as machine learning engineering. This push for hiring new talent aligns with Meta’s 2025 priorities. Despite the layoffs, Meta plans to keep its offices open on Monday, without issuing further updates on the decisions, according to a memo from Head of People, Janelle Gale.

The expedited hiring process for machine learning engineers and other vital roles will take place between February 11 and March 13. VP of Engineering for Monetization Peng Fan emphasized the importance of staff support in meeting these hiring goals.