Ark Investment Management bought over 400,000 Coinbase shares as COIN prices slumped thanks to an SEC lawsuit.
Cathie Wood’s company filled their coffers as the second largest COIN holders with 11.4 million shares amid tensions surrounding the publicly traded crypto exchange.
Coinbase is being sued by the U.S. Securities and Exchange Commission for selling unregistered securities and running an illegal securities exchange among other allegations.
“We’ll get the job done” CEO Brian Armstrong said in response to the upcoming legal tussle with the U.S. watchdog.
The investment management firm founded by Cathie Wood, Ark Invest Management, splurged $21.6 million on Coinbase stock shortly after a lawsuit from the U.S. Securities and Exchange Commission alleging securities violation by the crypto exchange.
Coinbase rival Binance was also sued by the U.S. SEC with claims of similar but different violations. The Binance suit included its American platform BAM Trading better known as Binance US and Binance CEO Changpeng Zhao.
Ark Invest purchased 419,324 shares of Coinbase stock COIN through three of its funds – ARK’s Innovation ETF (ARKK), the Next Generation Internet ETF (ARKW), and the Fintech Innovation ETF (ARKF). The latest buy means Cathie Wood’s company now owns 11.4 million COIN, the second largest shareholder at press time.
COIN’s price fell sharply in pre-trading following the news with a decline of over 40%.
The move by Ark Invest to purchase Coinbase stock at a discount is a clear indication of the company’s long-term bullish outlook on Brian Armstrong’s crypto exchange and perhaps the broader cryptocurrency industry in America.
SEC Sues Coinbase And Binance
On June 5, the SEC filed a lawsuit against Binance for allegedly offering unregistered securities, and the next day, the commission also sued Coinbase on similar grounds. The SEC further alleged that popular cryptocurrencies offered by both platforms such as SOL, ADA, and MATIC qualify as securities.
Both companies have come out to present their pending lawsuits as prime examples of the commission’s unwillingness to provide registration guidance. Instead, the SEC has opted for brute enforcement actions to “regulate” America’s crypto landscape, crypto proponents insist.