Cathie Wood Boosts Coinbase Stake As SEC Crypto Crackdown Widens

(Bloomberg) – Cathie Wood’s funds increased their holdings in Coinbase Global Inc. as shares tumbled after the Securities and Exchange Commission accused the company of conducting an illegal exchange.

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Three funds Ark Investment Management LLC, including Wood’s flagship Ark Innovation ETF, bought 419,324 shares of the cryptocurrency exchange operator on Tuesday as it fell 21%, according to data compiled by Bloomberg. . The SEC brought similar charges against Binance Holdings Ltd. Monday.

Ark is Coinbase’s fourth-largest holder and has been growing its stake on declines for nearly a year despite the volatility in the crypto market caused by the issuance, including the collapse of Sam Bankman’s empire- Fried, growing US regulatory repression and a wave of bankruptcies among companies in the sector.

The SEC alleged on Tuesday that Coinbase evaded regulator rules for years by allowing users to trade many crypto tokens that were actually unregistered securities. The stock operator responded by saying it was ready to take the legal fight all the way to the Supreme Court.

The crackdown on Coinbase has spread, with state regulators from California to New Jersey demanding the company stop its so-called staking service, which offers customers a return for letting their tokens be used to facilitate transactions blockchain.

Ark sold part of Coinbase’s holdings in July, citing regulatory uncertainty after the SEC deemed certain tokens listed on the US exchange’s platform to be securities. Even after Tuesday’s plunge, Coinbase shares are up nearly 60% from their all-time high in December.

Wood’s flagship fund is up 37% this year, compared to a 33% gain for the Nasdaq 100 index and a 12% gain for the S&P 500. Ark Innovation ETF fell 67% last year.

Wood’s company owned more than 11.7 million Coinbase shares, or 6.3% of outstanding shares, as of March 31. Earlier this year, she reiterated her $1 million price target for Bitcoin, the largest cryptocurrency, which is currently trading around $27,000.

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