Cathie Wood's ARK Bought $22M Worth of Coinbase Shares After the Price Tanked

By Nicholas Morgan

Cathie Woods’ tech-focused investment firm ARK Invest expanded its holdings of Coinbase shares after the stock took a blow. The reason: A massive lawsuit filed by the Securities and Exchange Commission.

Ark purchased 419,324 shares worth approximately $21.6 million at Tuesday's closing price of $51.61 through its three exchange-traded funds: ARK's Innovation ETF, Next Generation ETF, and Fintech Innovation ETF. In total, Ark now holds about 11,776,015 shares, making it the second largest owner of Coinbase shares after Vanguard Group.

This is not be the first time that Wood has scooped up Coinbase shares amid its long-running feud with the SEC. In March, Wood’s funds bought nearly $18 million worth of Coinbase shares after it received a Wells Notice from the SEC, a precursor to the lawsuit filed on Tuesday.

Coinbase's struggles with the SEC have, in some ways, run parallel to Wood’s own interactions with the regulator.

In March, Wood filed a third application with the SEC to launch a Bitcoin spot ETF after two previous attempts were rejected. To date, the SEC has approved four Bitcoin futures ETFs that offer shares to investors without involving direct ownership of Bitcoin itself, but none for the spot market.

Coinbase’s stock took a beating on Tuesday after the SEC launched its lawsuit, accusing the company of operating an unregistered exchange and for offering unregistered securities. After the SEC’s action, Coinbase’s stock on Nasdaq fell by more than 21% to $45.98. At the time of writing, COIN’s shares are being traded at $53.38.

Coinbase has accused the SEC of failing to issue guidance on how to operate without running afoul of its regulatory oversight.

In April, Coinbase asked a federal court to force the SEC to issue clearer crypto guidance and previously sent the SEC its so-called "petition for rulemaking" last summer, but no response was provided. After the SEC sued Coinbase, a federal judge ordered the agency to respond to Coinbase's request within the next seven days.

The SEC’s lawsuit follows one filed against Binance, t​​he world’s largest cryptocurrency exchange, on allegations of violating securities laws that include failing to register as an exchange and engaging in unregistered crypto transactions. Binance is also accused of commingling customer funds. The company has denied the charges and accused the SEC of overreach.

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