Coinbase was recently sent a Wells notice by the SEC, fuelling panic in the crypto community. Yet, its CEO Brian Armstrong’s most recent move has generated discussion among traders and investors.
Following the Wells notice on March 22, the top exec went on a selling spree, dumping a significant portion of his Coinbase shares [COIN] earlier this week.
One such trader questioned the move, implying that it was insider trading as he pointed out that the stock was down by nearly 15%.
In response, many came forward to say that it was just a coincidence and that the sale of the shares was part of an earlier scheme to finance his new businesses.
Armstrong is said to have sold COIN shares for $5.8 million during that time, with about 50% of the transactions occurring the day before.
According to the statistics, the top exec sold around 30,000 shares on March 21 for $2.24 million. Earlier, on March 3 and 15, he made two sales that totaled 60,000 shares for $3.56 million. The data revealed that he sold his stocks between the range of $51 and $76.
Market intelligence platform Dataroma further claimed that Coinbase executives and early investors have profited $5.8 billion from sales of the exchange’s stock.
Around $87 million worth of COIN shares has been acquired by insiders throughout this time. The transaction was carried out by co-founder Fred Ehrsam and exchange board member Tobias Lütke.
Even seasoned investors like Cathie Wood-led Investment funds Ark Invest sold the trading firm’s stock on March 21 for the first time this year for $13.5 million.
Intensifying its enforcement drive against major crypto players, SEC sent Coinbase a Wells notice over alleged “violations of the federal securities law.”
Coinbase Appears Confident Over SEC’s Notice
As a result, Brian defended the firm on Twitter, saying that it is on the right side of the law and that the legal process would bring about much-needed clarity.
The “Wells notice,” as per a blog published by the exchange, was regarding an undefined portion of its listed digital assets, staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
Terming the notice as a disappointment, the exchange slammed SEC as “unfair and unreasonable when it comes to its engagement on digital assets”.
At the time of writing, Coinbase shares had fallen by more than 12% over the previous 24 hours, and if the trend continues, a likely larger decrease is anticipated.
