Cathie Wood’s ARK Invest has been aggressively picking up Coinbase shares at a discount after the U.S. Securities and Exchange Commission (SEC) lawsuit against the company caused the stock to collapse.
New data from Cathie’s Ark, which tracks the hedge fund’s trades, reveals three separate Coinbase (COIN) purchases on June 6, totaling approximately 419,000 shares worth more than $21 million.
The SEC first filed a lawsuit against Coinbase earlier this week, alleging that the products it offers were all “crypto asset securities” that fell under the jurisdiction of securities laws.
According to the regulatory body, Coinbase is being sued for allegedly “acting as an unregistered stock exchange, broker and clearing house” and “failing to register the offering and sale of its crypto-asset staking-as-a-service program.”
In addition, the SEC alleges that Coinbase ignored the “Howey Test,” a decades-old Supreme Court ruling that establishes criteria for companies to determine whether a transaction qualifies as an investment contract or not, in order to maximize profits.
“As part of its public marketing campaign to position itself as a ‘compliant’ actor in the crypto asset space, Coinbase has for years touted its efforts to analyze crypto assets according to the standards set forth in Howey before making them available for trading.
But while paying lip service to their desire to comply with applicable laws, Coinbase has for years made available crypto assets that are investment contracts under the Howey test and established principles of federal securities laws.
As such, Coinbase has its interest in raising its profits over the interests of investors, and above compliance with the law and the regulatory framework that governs securities markets and was created to protect investors and the US capital markets.
In addition to Coinbase, the SEC has filed a lawsuit against Binance, the world’s largest crypto exchange by volume, for similar violations.
At the time of writing, COIN is trading at $52.65, up 2.8% on the day. However, it fell from $58.26 to $47.03 after the lawsuit was announced, a 21% dip.
Don’t Miss Out – Subscribe to receive crypto email alerts delivered straight to your inbox
Check price action
follow us on Twitter, Facebook And Telegram
Surf the Daily Hodl mix
Featured image: Shutterstock/IR Stone
