Ark Invest dumps $75 million worth of Coinbase shares, COIN crashes 21%

• Ark Invest dumped more than $75 million worth of COIN stock on Tuesday spread across its three actively-managed ETFs.
• Coinbase is currently facing tough scrutiny by the U.S. SEC which has also accused the crypto trading platform of securities fraud.

Things are absolutely not going well for Coinbase at this moment! One of Coinbase’s biggest advocates Ark Invest decided to sell its stock partially. On Tuesday, July 26, Cathie Wood’s Ark Invest dumped more than 1.4 million shares of Coinbase (NASDAQ: COIN).

The sale was spread across Ark Invests’ three actively-managed exchange-traded funds (ETFs). This includes the likes of Ark Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF).

As per the data on Bloomberg, Ark Invest remains the third-largest shareholder in Coinbase by the end of June. The firm has been buying the COIN stock ever since the company debuted on Wall Street last year in April 2021. Interestingly, Ark’s latest purchase of the COIN stock was on May 22 last quarter. By the end of Q2 2022, Ark Invest was holding more than 8.95 million COIN shares.

The firm’s flagship ETF ARKK has been one of the biggest investors in growth stocks. It was one of the top-performing ETFs during the crypto bull run last year. However, the value of ARKK ETF has plunged more than 57.84 percent this year amid concerns of monetary tightening.

On the other hand, the COIN stock has been on a freefall losing more than 80 percent of its value year-to-date. As of Tuesday’s closing, the COIN stock was trading at $52.93.

There’s no reason provided by Ark Invest behind this recent selling. However, the dark clouds of SEC scrutiny are hovering over Coinbase currently. there’s every possibility that Coinbase could engage in a legal battle with the U.S. securities regulator.

Coinbase vs SEC

Last week, the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) launched an investigation into insider trading matters by Coinbase executives. It turned out that three executives were using confidential information about token listings to make heavy profits.

Related: Coinbase executives accused of insider trading, Coinbase responds on securities fraud charges

But apart from that, the U.S. SEC made an observation that several of the coin listed on the Coinbase exchange have been securities. Coinbase has refuted the allegation of any involvement in securities fraud. Coinbase’s chief legal officer Paul Grewal said: “Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed”.

As per sources familiar with the matter, the exchange is already facing a probe from U.S. regulators on the matter. Sources told Bloomberg that the SEC’s scrutiny of the exchange increased ever since the platform expanded its token offerings very fast over the last year.