The third-largest shareholder of the cryptocurrency exchange Coinbase is getting rid of shares worth $75 million due to an investigation by the US regulator.
Investment firm Ark Invest, led by investor Cathie Wood, has published a newsletter revealing that the company has disposed of more than 1.4 million Coinbase Global (COIN) shares totaling $75 million. Prior to that, Ark Invest was the third largest largest shareholder of a cryptocurrency exchange.
The sale covers three of the company’s actively managed ETFs: Ark Innovation (ARKK), Next Generation Internet (ARKW) and Fintech Innovation (ARKF), with ARKK selling 1,133,495 shares of COIN.
1/ Investment firm ARK Invest sold 1.4 mln COIN of its 6 mln+ shares. The ARKK purchased COIN at an average cost of $254.65. https://t.co/FlYX7wnVUF pic.twitter.com/h0wcm9L6Tc
— Forkast News (@Forkast_News) July 27, 2022
This is due to a recent investigation by the US Securities and Exchange Commission (SEC) in relation to the crypto exchange. According to Bloomberg, the SEC officially accuses some former Coinbase top managers of insider trading. However, according to unnamed sources of the publication, in fact, the regulator is trying to find out if there are tokens that are securities on Coinbase.
After the news about the beginning of the investigation, the company’s shares fell more than 20% to $52.93. At the end of June, Ark Invest owned 8.95 million shares of the crypto exchange. Ark Invest has been buying shares in Coinbase since the cryptocurrency exchange debuted on Nasdaq in April 2021, with its last major purchase of more than half a million shares worth $30 million in May.
Coinbase vehemently denies all allegations, with company general counsel Paul Grewal assuring that the exchange’s due diligence process keeps securities out of the platform.
Earlier, the head of Coinbase Institutional, Brett Tejpaul, said that the bankrupt crypto companies themselves are to blame for their problems, because they neglected the basic rules for managing financial risks.
Source: Bits
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