Tensions simmer in the crypto-world as ARK Invest slims down its holdings in Coinbase. Bloomberg’s data indicates that the investment management firm, guided by Cathie Wood, sold approximately 135,152 Coinbase shares. This sale, estimated at around $12 million, represents a mere 0.14% fraction of the fund’s aggregate holdings. The divestment comes amidst Coinbase’s striking performance with its stock accelerating towards a year-long zenith.
However, casting a look at the broader picture unfolds an intriguing scenario. This isn’t ARK’s first foray of shedding Coinbase shares in recent times. The investment firm previously offloaded 160,887 Coinbase shares in March, valued at roughly $13.5 million or $84 per share. Interestingly, these sales arrived while Coinbase shares have been enjoying an encouraging uptrend.
In the face of it, Coinbase’s stock has soared by over 60% in the past month, with year-to-date growth exceeding 140%. Despite these occasional sales, ARK’s overall approach towards Coinbase leans more on the side of accumulation. A stellar example of this is mirrored in June when ARK purchased approximately $40 million worth of Coinbase shares.
Nevertheless, these intricate market maneuvers play out against the backdrop of increased regulatory scrutiny hanging over Coinbase. On one end is Coinbase, whose stock persistently marches north. But, looming over it is the shadow of the mighty US Securities and Exchange Commission (SEC). It alleges that the predominant US-based cryptocurrency exchange was aware of potential securities breaches during the listing of some cryptocurrencies.
In a revealing filing, the SEC dismissed Coinbase’s claims of innocence regarding violating securities laws, presenting the company as one with discerning legal counsel. The contention deepens as the SEC drags Coinbase to court with charges of trading and distributing unregistered securities along with several other allegations.
The SEC’s constricting regulatory grip on Coinbase extends to Show Cause orders from 11 US states. This move presses Coinbase to justify why it shouldn’t cease its operations in respective states.
Despite the surging stock values, the regulatory hurdles present a sharp turn in the road for Coinbase. The action of ARK Invest, simultaneously accumulating and selling shares, demonstrates the volatile dance between profit-making and risk management in the cryptomarket. It remains to be seen how this course navigates the delicate tightrope walk between regulation and innovation.
Source: Cryptonews
