ARK Invest Acquires Coinbase Shares Amidst Simultaneous SEC Lawsuit Filing

The same day cryptocurrency exchange Coinbase was served with a lawsuit from the United States Securities and Exchange Commission, ARK Invest added more stock to its Coinbase holdings.

According to an investor notification from ARK Invest on June 6, the firm purchased approximately 419,324 shares of Coinbase Global Inc., amounting to a value of nearly $21.6 million at the time of closing on the same day.

This acquisition occurred as Coinbase stock experienced a significant decline of over 20% on June 6, following the SEC’s legal action and the announcement of the lawsuit. At the time of writing, Coinbase’s stock price stands at around $53.11.

ARK Invest’s Continuous Addition of Coinbase Stocks

The addition of Coinbase stocks to the ARK Invest portfolio follows a trend. On May 2, approximately a month prior, ARK Invest purchased an additional 168,869 Coinbase shares, equivalent to around $8.5 million. The firm also made investments in March and April, acquiring 2.4 million shares for approximately $117 million and 304,300 shares worth $17.5 million, respectively.

SEC Lawsuit Allegations and Coinbase’s Response

The recent lawsuit filed by the SEC against Coinbase accuses the exchange of offering unregistered securities and failing to register as a broker, national securities exchange, or clearing agency.

In response, Coinbase CEO Brian Armstrong took to Twitter, expressing confidence in their facts and the law. He also welcomed the opportunity to seek clarity on crypto regulations through the legal process.

Coinbase’s chief legal officer, Paul Grewal, testified before the U.S. Congress on June 6, highlighting the company’s commitment to regulatory compliance. Grewal stated that in 2022 alone, Coinbase had engaged with the SEC 30 times to seek regulatory guidance.

Show Cause Order and Allegations from State Security Regulators

In addition to the SEC lawsuit, Coinbase was issued a Show Cause Order on June 6 by a task force of state security regulators from states such as Alabama, California, Illinois, and Vermont, among others. The order alleges that Coinbase’s staking rewards program violates securities laws.