Cathie Wood’s Ark Invest Dumps $75M in Coinbase Stock

Ark Invest, the investment firm helmed by Cathie Wood, dumped a total of more than 1.4 million shares of Coinbase Global (COIN) on Tuesday, per the firm’s daily trade information newsletter.

The sale is spread out across the company’s three actively managed exchange-traded funds: Ark Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF), with ARKK selling as many as 1,133,495 COIN shares.

Coinbase stock closed Tuesday down 21.08% at $52.93, meaning Ark Invest disposed of approximately $75 million worth of shares in the San Francisco-based company.

Ark Invest was Coinbase’s third-biggest shareholder, holding about 8.95 million shares at the end of June, according to Bloomberg. The firm has been buying Coinbase stock since the crypto exchange debuted on the Nasdaq in April 2021, with the latest major purchase of more than half a million shares worth $30 million happening in May.

ARKK, the firm’s flagship ETF, was a big winner after hefty stock market gains in 2020; however, it plunged 57.84% since the start of the year amid fears that monetary tightenings across the globe may severely dampen broader growth in stocks.

SEC probes Coinbase

The move―the first this year―comes in the aftermath of reports that the U.S. Securities and Exchange Commission (SEC) is investigating Coinbase for allowing Americans to trade in tokens that should have perhaps been registered as securities.

A possible investigation relates to the insider trading case launched by the SEC last week when the agency said one of Coinbase’s former employees was violating the company’s insider trading rules by tipping off other individuals on the platform's future token listings.

Coinbase vehemently denied the allegations, with the company’s chief legal officer Paul Grewal saying that the exchange’s “rigorous diligence process―a process the SEC has already reviewed―keeps securities off our platform.”

In a separate move last week, Coinbase filed a petition with the SEC to improve "rulemaking on digital asset securities."