Cathie Woods’ tech-focused investment firm ARK Invest has expanded its holdings of Coinbase shares despite the company being at the center of a high-profile lawsuit filed by the Securities and Exchange Commission (SEC). ARK purchased 419,324 shares worth approximately $21.6 million through its three exchange-traded funds: ARK’s Innovation ETF, Next Generation ETF, and Fintech Innovation ETF. This brings ARK’s total holdings to around 11,776,015 shares, making it the second-largest owner of Coinbase shares after Vanguard Group.
These recent developments provide further context to the ongoing struggles between cryptocurrency companies and regulatory bodies. On one hand, the SEC’s aggressive actions could be interpreted as a wake-up call for the industry to comply with established regulations actively. On the other hand, the lack of clear guidance from the regulatory body may cause companies like Coinbase to operate in uncertain territory, increasing the risk of legal actions and dampening investor confidence.
Another instance of institutional pushback against the SEC’s actions can be seen in Woods’ own interactions with the regulator. In March, Wood filed a third application with the SEC to launch a Bitcoin spot ETF, following two previous rejections. Thus far, the SEC has approved four Bitcoin futures ETFs, but none for the spot market.
Coinbase has publicly accused the SEC of failing to provide sufficient guidance on operating within the confines of its regulatory oversight. In response, the company requested that a federal court force the SEC to issue clearer crypto guidance and submitted a “petition for rulemaking” last summer. With no response provided, a federal judge has now ordered the SEC to respond to Coinbase’s request within the next seven days.
The SEC’s action against Coinbase is reminiscent of the lawsuit filed against Binance, the world’s largest cryptocurrency exchange. Binance faces allegations of violating securities laws, including failing to register as an exchange and engaging in unregistered crypto transactions. The company is also accused of commingling customer funds. Binance has denied the charges and accused the SEC of overreaching its mandate.
In summary, the ongoing legal imbroglio between the SEC and major crypto platforms like Coinbase and Binance highlights the need for clarity and cooperation in the fast-evolving cryptocurrency space. While regulatory oversight plays a crucial role in protecting investors and ensuring market stability, it becomes imperative for regulators like the SEC to provide unambiguous guidance and maintain open communication with the industry to foster growth and development.
Source: Decrypt
