Tuesday, August 16, 2022

Ark Investment Dumps Coinbase Shares Amid Charges of Insider Trading

The Takeaway:

As regulators apparently look into the company for possible insider trading, one of Coinbase’s major shareholders sold a sizable number of shares.

According to trading data collated by Bloomberg, Cathie Wood’s investment company Ark Investment Management has sold more than 1.4 million Coinbase (COIN) shares overall.

Three Ark exchange-traded funds (ETFs) were involved in the transaction, including Ark Innovation ETF (ARKK), which sold 1,133,495 shares in total, or 0.6 percent of its total assets.

COIN vs USD
COIN, the native coin of Coinbase, lost 17 % on Tuesday after the news of the dump broke out. Source: Tradingview.com

174,611 and 110,218 COIN shares were sold by the Ark Next Generation Internet ETF & Ark Fintech Innovation ETF, respectively. The value of the sold shares was just over $75 million based on Tuesday’s closing price.

On Tuesday, Coinbase shares lost 14 percent of their value and finished at $52.63. However, it has recovered back to 58.83 at the time of writing.

Coinbase share price
Coinbase on the Nasdaq exchange lost 16 % on Tuesday. But has recovered back to $ 58. Chart: Tradingview.com

American authorities detained a former CEO of Coinbase Global on July 21 for alleged insider trading. After briefly exhibiting signs of recovery in mid-July, Coinbase stock has been falling ever since. According to information from TradingView, the Coinbase stock has dropped nearly 32% since reaching $77.3 on Friday.

The trade happened after Ark steadily increased its COIN holdings this year, purchasing 546,579 Coinbase shares in May despite a decline in Coinbase share price. Since Coinbase’s IPO last year, the investment company has been actively acquiring its shares, and by April 2022, it will have roughly 750,000 shares total. The stock’s initial opening price was $350.

By holding over 9 million shares by the end of June, Ark ranked third among Coinbase’s shareholders, according to a Bloomberg article. According to reports, the liquidation marked Ark’s first COIN sale of the year.

The U.S. Securities and Exchange Commission (SEC) is looking into Coinbase because of the company’s alleged involvement in cryptocurrency insider trading. Caroline Pham, an SEC commissioner, voiced worry that Coinbase may have inappropriately allowed Americans to deal with crypto investments that should have been reported as securities.

 

Dwindling Fortunes of Coinbase

Recently, Coinbase was overtaken by Binance in terms of Bitcoin holdings. It would be interesting to see how Coinbases manages to bounce back amid all these adversities.

Bitcoin holdings: Coinbase vs Binance
Bitcoin holdings: Coinbase vs Binance. Binance has finally taken over Coinbase in the no. of Coinbase holdings. Source: Glassnode

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Vivekanandan Tiwari
Vivekanandan Tiwari
Vivekanandan is an IT graduate, He loves to write about blockchain-related techs. He is enthusiastic about Financial markets and is always eager to learn.

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