One of the largest shareholders in cryptocurrency exchange Coinbase has divested a massive number of shares as regulators reportedly investigate the company for alleged insider trading.
Cathie Wood’s investment firm, Ark Investment Management, has sold a total of more than 1.4 million shares of Coinbase (COIN), according to daily Ark trading data from July 26.
The sale affected three Ark ETFs, including Ark Innovation ETF (ARKK), which unloaded a total of 1,133,495 shares, or 0.6% of the ETF’s total assets. Ark Next Generation Internet ETF Y Ark Fintech Innovation ETF they sold 174,611 and 110,218 COIN shares, respectively. Based on Tuesday’s closing price, the value of the shares sold was just over $75 million.
Coinbase shares closed at $52.9 on Tuesday, losing 21% in value amid the sell-off. After showing some signs of revival in mid-July, Coinbase shares have plunged as US authorities arrested a former Coinbase Global executive on July 21 for alleged insider trading. Since hitting $77.3 on Friday, Coinbase shares have lost about 32% at the time of writing, according to data from TradingView.
The sale came after Ark was steadily bolstering its COIN stash this year, buying 546,579 Coinbase shares in May despite Coinbase shares falling. The investment firm has been actively buying Coinbase shares shortly after Coinbase debuted its shares last year, amassing some 750,000 shares as of April 2022. The shares originally opened at $350.
According to a Bloomberg news, Ark is the third largest shareholder of Coinbase, with almost 9 million shares at the end of June. The sale reportedly became Ark’s first COIN sale this year.
Coinbase is reportedly facing an investigation by the US Securities and Exchange Commission (SEC) into the company’s possible involvement in cryptocurrency insider trading. SEC Commissioner Caroline Pham raised concerns that Coinbase may have improperly allowed Americans to trade digital assets that should have been registered as securities.
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