Per the latest allegations, Coinbase is operating as an unregistered national securities exchange and broker.
Ark Invest remains bullish on Coinbase (NASDAQ: COIN) despite the fact that the US Securities and Exchange Commission (SEC) is currently indicting the crypto company. The asset management company acquired additional Coinbase shares on the same day the regulator slammed the crypto exchange with a new lawsuit, causing its stock to plunge.
Ark Buys Coinbase Shares Amid SEC’s Lawsuit
On Tuesday, Ark’s Next Generation Internet ETF purchased 53,885 shares, while its flagship ETF, Ark Innovation ETF, acquired 329,773 shares of Coinbase. An update from the fund manager’s trading desk revealed that Ark Fintech Innovation ETF also bought 35,666 of the crypto company’s shares. Using the stock closing price of about $52 per share, the total Coinbase shares that Ark Invest bought were worth $21.64 million.
Ark Invest conducted the transaction just as Coinbase dropped as much as 21% before eventually closing down 12% due to the SEC lawsuit. Notably, this is not the first time the exchange will fall under the Commission’s radar. A couple of months ago, the regulator issued an enforcement action notice to Coinbase over potential violations of securities law. Despite the Wells Notice, the publicly traded company was unmoved by the regulator’s action. It said the allegations would not affect its current products and services, adding that none of its listed assets were securities.
In response to the suit, chief legal officer Paul Grewal stated:
“If needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the Commission simply has not been fair or reasonable when it comes to its engagement on digital assets. Until then, it is business as usual.”
SEC Issues Wells Notice to Coinbase
Per the latest allegations, Coinbase is operating as an unregistered national securities exchange and broker. The SEC stated that the business has been serving as such since at least 2019 when it commenced engaging in crypto transactions. In addition, the case mentions that the company used Coinbase Prime and Coinbase Wallets to attract investors.
Coinbase shares, the 5th largest stock holding across Ark Invest’s funds, have gathered some gains after closing down 12.09%. At press time, COIN is up 3.86% to $53.50. Except for growing nearly 46% since the year started, the company has consistently declined in the last three months. The exchange’s stock has lost 18.08% in the last three months and 17.61% over the past month. It has also shed 17.03% in the last five days.
Data shows that Ark holds about $736 million worth of Coinbase shares across its funds.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
