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The investment company still holds about 7.1 million shares of the crypto exchange.
The founder and CEO of asset management company Ark Investment, Cathie Wood, recently discussed how the SEC influenced the company to drop its Coinbase (NASDAQ: COIN) shares. According to Wood, Ark Investment sold a portion of its Coinbase shares after the SEC listed nine assets that are securities on the exchange.
Last month, the Securities Exchange Commission claimed that a minimum of nine digital assets on Coinbase are unregistered. The regulator revealed its claim in a complaint against a former employee at the crypto firm. The nine assets in question include AMP (AMP), Rally (RLY), DerivaDEX (DDX), XYO (XYO), and Rari Governance Token (RGT). Others are LCX (LCX), Powerledger (POWR), DFX Finance (DFX), and Kromatika (KROM). According to the Commission, the nine tokens represent the “hallmarks of the definition of a security.” SEC stated:
“Thus, at all times relevant to the conduct alleged in this complaint, a reasonable investor in the nine crypto asset securities would continue to look to the efforts of the issuer and its promoters, including their future efforts, to increase the value of their investment.”
SEC’s Claim Pushes Ark Investment to Drop Coinbase Shares
On 8th August, Ark Investment CEO confirmed that the SEC’s claim influenced the sales decision. According to a Bloomberg report, the claim sparked some “regulatory “uncertainty” for the entire crypto market. Amid the ongoing dispute between the exchange and the US financial watchdog, Ark Investment sold 1.41 million shares in Coinbase. The transaction, which occurred on 26th July, was worth $75 million. However, the asset manager did not sell all its shares in Coinbase.
The investment company still holds about 7.1 million shares of the crypto exchange. At the Coinbase current trading price of $97.75 in premarket trading, Ark Investment holdings are worth over $694 million. The asset manager has been buying Coinbase stock since the exchange went public on the Nasdaq last year. As of June end, Ark Investment was the third-largest Coinbase shareholder with 8.95 million shares.
According to Wood, selling Coinbase shares came as Shopify’s stock was down and seemed like a favorable alternative. The executive also said confusion and uncertainties between the exchange and the SEC added to the move. She wonders what would happen to Coinbase’s business model if it had to delist so many tokens. Speaking further on Ark Investment dropping Coinbase stock, Wood said it had nothing to do with the alleged insider trading scheme.
In addition to shedding almost 64% over the past year, Coinbase stock has declined 61.6% since January. However, the company has been rebounding since then, pulling in a 34.29% stock price gain in the last three months. COIN has also advanced 80.72% over the past month and another 45.805 in the last five days.