Cathie Wood buys $21 million worth of Coinbase shares after SEC complaint

Fund manager Cathie Wood and her management company ARK Invest have stocked up Coinbase (COIN) as the crypto exchange stock fell on Tuesday after the Securities and Exchange Commission filed charges.




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Cathie Wood buys the dip on COIN

Wood and ARK bought a total of 419,324 COIN shares on Tuesday, worth $21.64 million based on the closing price of 51.61, according to ARK Invest’s daily trading update. Wood added 329,773 shares to the ARK Innovation ETF (ARKK), 53,885 shares at ARK Next Generation Internet ETF (ARKW) and 35,666 COIN shares at ARK Fintech Innovation ETF (ARKF), respectively.

Coinbase shares plunged 12% on Tuesday after the SEC filed a lawsuit against the company for operating as an unregistered exchange. The SEC’s lawsuit came a day after it filed 13 charges against Binance, the world’s top crypto exchange.

This isn’t the first time this year that Wood has bought falling COIN stocks. ARK Invest acquired $17.83 million worth of stock in late March after Coinbase received a Wells Notice from the regulator, a warning that the SEC intended to recommend enforcement action for potential securities violations . Wood has consistently added Coinbase shares throughout the year and made another $16 million purchase ahead of its results in early May.

SEC receives court orders

Following the filing of the formal complaint, the Third Circuit of the United States Court of Appeals gave the SEC one week to respond to Coinbase’s motion for rulemaking, according to a Tuesday evening order. Coinbase submitted the petition for rulemaking in June 2022, asking for clarification on definitions and SEC guidelines. He followed in April, filing a lawsuit against the SEC in an attempt to force a formal ruling.

The Third Circuit ordered the SEC to determine whether it decided to deny the rulemaking request, which would allow the crypto industry to be regulated under existing frameworks. The order requested an official timeline from the SEC if a decision was not made. And the court asked why the Third Circuit shouldn’t retain jurisdiction and create a deadline for its own decision on the petition.

Coinbase Stock

COIN stock jumped 2.8% in early trading on Wednesday, looking to recoup some of its losses for the week. Coinbase shares fell 20% for the week through Tuesday’s close, following the SEC lawsuits. Still, COIN stock has surged nearly 46% so far this year as bitcoin and cryptocurrency prices recoup lost ground.

Wood saw his three ARK ETFs that bought Coinbase rise slightly early Wednesday.

You can follow Harrison Miller for more stock info and updates on Twitter. @IBD_Harrison

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