By George Ward
Cathie Wood’s investment management firm, ARK Invest, has resumed purchasing shares of Coinbase after a brief pause. The move is surprising given the recent dip in the stock price of Coinbase following news of the company’s receipt of a Wells notice from the SEC.
ARK Invest Is Confident In The Future Potential Of Coinbase
Despite this setback, ARK Invest is confident in the future potential of Coinbase and has opted to invest in the company once again. ARK Invest, Cathie Wood’s investment management company, bought nearly 269K shares of Coinbase on Thursday through its two popular ETFs.
The value of the purchased shares was approximately $17.88 million when the purchase was made. It is worth noting that Cathie Wood’s investment management firm sold about 161K Coinbase shares from its ARK Fintech Innovation ETF a few days before the news of the Wells notice for Coinbase became public knowledge.
This marked the first time ARK Invest’s ETFs sold any Coinbase shares in 2023. Coinbase’s share price plunged by approximately 21% after it revealed that it had received a Wells notice from the US SEC about possible enforcement action.
According to recent reports, Coinbase Chief Executive Officer Brian Armstrong sold some of his company shares between March 17 and March 20. This sale happened a few days before the company announced that it had received a Wells notice from the SEC and experienced a dip in its share price.
Industry analysts opine that the executives and insiders at Coinbase had pre-planned selling arrangements, known as 10B5-1 selling plans, several months before news of the Wells notice. Some reports claim that the recent sales of shares by Coinbase executives were part of a larger trading plan they adopted last August.
Coinbase Staking Products Categorized As Securities
Last month, the Securities and Exchange Commission (SEC) reached an agreement with Kraken, a cryptocurrency exchange, over allegations that its staking services constituted securities. However, Coinbase has taken a different stance, repeatedly stating that its staking products are fundamentally dissimilar from Kraken’s and cannot be categorized as securities.
Coinbase argues that its staking services support the underlying blockchain networks’ operations rather than generate profits for the company or investors. Moreover, Coinbase claims that the SEC has provided no clear guidance or regulatory framework regarding staking services in the crypto industry, leaving companies to navigate the space with ambiguity and uncertainty.