In what appears to be confidence in Coinbase winning the legal battle against the US Securities and Exchanges Commission (SEC), Cathie Wood’s Ark Investment Management has bought 419,324 Coinbase shares (COIN) as prices tumbles.

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Coinbase has promised to stage a spirited fight for the sake entire crypto industry. However, its stock has suffered a heavy blow after it dropped by 12.09% in a single day following the announcement that the SEC had sued it.

SEC’s issue with Coinbase

As earlier reported here, the US SEC alleges that Coinbase has been operating as an unlicensed broker, exchange, and clearing agent.

In a tweet responding to the SEC suit, Coinbase clearly stated that they can’t understand why the SEC could go after them despite being cleared to become a public company in 2021. In the reply, Coinbase states:

 

“Regarding the SEC complaint against us today, we’re proud to represent the industry in court to finally get some clarity around crypto rules.

 

Remember: 1. The SEC reviewed our business and allowed us to become a public company in 2021. 2. There is no path to “come in and register” – we tried, repeatedly – so we don’t list securities. We reject the vast majority of assets we review. 3. The SEC and CFTC have made conflicting statements, and don’t even agree on what is a security and what is a commodity. 4. This is why the US congress is introducing new legislation to fix the situation, and the rest of the world is moving to put clear rules in place to support this technology.”

Coinbase woes follow those of its rival crypto exchange Binance which had earlier been charged with almost the same allegations by the SEC. Interestingly, the SEC suit came barely hours after Coinbase Legal Officer Paul Grewal testified before Congress over the new cryptocurrency bill.

Ark’s Coinbase shares

The recent Coinbase shares purchase, which is the first since May 3, took ARK Invest’s total Coinbase holdings to 11.44 million shares valued at around $590 million. The investment management company bought 419,324 COIN shares, valued at $21.6 million based on Tuesday’s closing price of $51.61.

The acquired shares were shared among ARK’s Next Generation Internet ETF, the Fintech Innovation ETF, and Innovation ETF (ARKK).

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