Cathie Wood ditches Coinbase shares as woes mount for crypto exchange
A growing crisis of confidence in Coinbase shows no sign of abating, as high-profile US stock picker Cathie Wood became the latest to sound the alarm bell by dumping shares in the embattled crypto exchange.
Wood’s investment firm Ark Invest sold more than 1.4 million shares in the Nasdaq-listed company via three separate funds this week, according to a trading update issued on 27 July, just months after buying more than half a million shares in the company.
The majority of sales came from the Ark Innovation ETF, which ditched 1.13 million Coinbase shares, totalling about 0.68% of the ETF’s total investments. The rest came via Ark’s Next Generation Internet ETC and its Fintech Innovation ETC.
Financial News has approached Ark Invest and Coinbase for comment.
READ Cathie Wood’s Ark to shut Transparency ETF
Wood has emerged as a prominent champion of the crypto industry in recent months, touting bitcoin as not only a good investment and an inflation hedge, but also as a uniter of a divided US population.
Those comments came shortly before the sector became engulfed in crisis, with the implosion of stablecoin terraUSD and its paired cryptocurrency luna sparking a chain reaction which has led to companies like lender Celsius and broker Voyager Digital filing for bankruptcy.
Coinbase has been firefighting on multiple fronts in recent weeks. The Securities and Exchange Commission has opened two investigations into the exchange, one around alleged insider trading and another around whether Coinbase let people trade digital assets that should have been registered as securities.
The latter was first reported by Bloomberg, citing sources familiar with the probe.
READ Ex-Coinbase manager accused in crypto insider trading probe
“We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” Coinbase’s chief legal officer Paul Grewal said on 26 July.
The company was also forced to cut 1,100 jobs in May, about one-fifth of its workforce, following the market crash. Goldman Sachs warned in a subsequent research note that it may have to cut even more before the year is out, downgrading Coinbase’s stock to a “sell” rating.
Ark Invest was listed as the second-biggest institutional shareholder in Coinbase, holding 8.95 million shares as of the end of June, according to Nasdaq data. The crypto exchange’s shares lost about 21% of their value on 26 July, and are roughly 79% down for the year to date.
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