Just a day after COIN shares fell on news of Wells’ notification, Cathie Wood’s investment management firm resumed buying Coinbase stock. On March 23, ARK Invest purchased 268,928 shares of Coinbase stock through its ARKK Innovation and ARKW Next Generation Internet exchange-traded funds. As of this writing, those shares are worth $17.88 million.
Just two days ago, ARK Invest sold 160,887 shares of Coinbase from its ARK Fintech Innovation ETF before news of Wells’ notification broke. The sale is the first time any of ARK Invest's ETFs will dump Coinbase stock in 2023. Coinbase’s shares failed to recover as it shared news that it had received a notice from Wells warning of potential SEC enforcement action, sending COIN shares down about 21%.
Coinbase shares fell to a low of $64.27 after the start of trading on March 23, and were trading at $66.87 in after-hours trading at the time of writing, according to Barron’s. Coinbase CEO Brian Armstrong also sold stock in his company between March 17 and March 20 — just days before Wells’ notice and the stock’s drop.
However, SEC filings show that both Coinbase executives and insiders had planned the 10B5-1 sale months in advance, and that the sales were made in accordance with the trading plan approved on Aug. 16.
While the SEC asserted that its staking service qualifies as a security after reaching a settlement with cryptocurrency exchange Kraken on Feb. 9, Coinbase has repeatedly claimed that its staking offerings are fundamentally different from Kraken’s and that they cannot be universally labeled as securities.
