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Ark Invest paid $75 million for 1.41 million Coinbase shares, citing the exchange's poor performance as the key cause.
According to AArk Invest's transaction data for July 25, it sold approximately 1.41 million Coinbase Global Inc shares owing to poor stock performance during the bear market and an ongoing SEC probe.
On July 25, Coinbase shares ended at $52.93 after three Ark funds sold out a portion of its position. The sales were detailed in the company's intra-day transaction sheet.
ARK Innovation ETF (AARK) sold 1,133,495 shares, followed by ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF (ARKF). A total of 1418324 Coibase shares were sold, representing 2.04 percent of the exchange's holding.
Ark Invest's participation in COIN Shares
Following its Nasdaq launch on April 14, 2021, Coinbase became the first cryptocurrency exchange to go public. Its share price peaked at $400 on opening day but has subsequently dropped to roughly $52, marking a more than 85% price drop.
On the first day of trade, Cathie Wood's Ark Invest purchased 749,205 shares for $246 million through its AARK, ARKW, and ARKF funds.
Following the exchange's dismal first-quarter report, its share price fell to $53.72 on May 12, 2022. Ark Invest took advantage of the chance to raise its holdings by 546,579 shares worth about $2.9 million.
The recent decrease in Coinbase trading volumes and revenues may have shifted Ark's stance from purchasing to selling. As a result, on July 27, the investment fund disclosed in its transaction notification email that it had sold 1,418324 Coinbase shares for $75 million.
The SEC is investigating Coinbase.
The falling value of the COIN share might be tied to a developing schism between Coinbase and the SEC. Following charges of insider trading against former Coinbase product manager Ishan Wahi, the SEC started an inquiry into the type of assets offered on the exchange.
The SEC claimed that nine of the digital assets implicated in the crime were securities in a July 21 complaint filed against Ishan and his associates. Coinbase responded by stating that its vetting procedure is designed to keep securities off the site. Coinbase also urged the SEC to provide a clear regulatory framework for the cryptocurrency business.
The SEC is now investigating Coinbase to see if it purposefully allowed Americans to trade digital assets that were not registered as securities. According to Bloomberg News, the increasing listings on the exchange may have piqued the interest of the US watchdog.
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