The regulator alleges the exchange mishandled company funds and showed a “blatant disregard of the federal securities laws.”īut even before crypto’s latest troubles, Wood was adding to her holdings in Coinbase because of her faith in cryptocurrency’s long-term potential. Binance, the world’s leading crypto exchange by volume, was also sued by the SEC this week. Wood’s vote of confidence in Coinbase comes during trying times for the crypto community. Coinbase stock recovered nearly 3% by midday Wednesday. Wood’s flagship fund now holds 8.3 million shares of Coinbase worth over $430 million the ARK Fintech Innovation ETF holds nearly 1.4 million shares, worth over $70 million and the ARK Next Generation Internet ETF holds 1.7 million, worth over $85 million. The flagship ARK Innovation ETF added nearly 330,000 shares, while the ARK Next Generation Internet ETF and ARK Fintech Innovation ETF, bought roughly 53,900 and 35,700 shares, respectively. Her Tuesday purchases were worth more than $20 million as of Tuesday’s closing price and were split between three actively traded ETFs. And CEO Brian Armstrong was quick to fire back at the SEC after the announcement, saying his team is “confident in our facts and the law” and that he’s “proud to represent the industry in court to finally get some clarity around crypto rules” in a Tuesday tweet.Ĭathie Wood wasn’t fazed by the lawsuit either. Less than three months ago the crypto exchange was given a Wells Notice by regulators-a document informing firms they’re under investigation. While unwelcome to executives at Coinbase, the SEC lawsuit wasn’t necessarily a surprise. “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: The consequences for the investing public are far too great,” he added in a rebuke of the firm. Grewal, director of the SEC’s division of enforcement, said in a statement following the lawsuit announcement that Coinbase’s executives had knowingly offered unregistered securities to investors. On Tuesday, Wood doubled down on her bullish crypto stance, picking up nearly 420,000 shares of Coinbase stock as it plummeted 11.4% after the Securities and Exchange Commission sued the crypto exchange, alleging that it has operated as a broker, securities exchange, and clearing agency without proper registration.
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