US SEC Accuses Coinbase CEO Of Insider Trading; Crypto Community Reacts
Analysts have highlighted that early in the week, Brian sold many of his shares in Coinbase, raising doubts about his motives. Earlier in the week, the exchange disclosed that it was served the Wells Notice by the US SEC concerning its offerings from Coinbase’s Earn Program.
This Notice is usually a precursor to an enforcement measure, and if the SEC decides to pursue the matter, the exchange’s stock value may experience a substantial decline. The community’s anger is now whether Armstrong betrayed his investors by selling shares based on prior awareness of the Notice.
With the sales dating back to March 3 while the Notice was announced on March 22, some remain skeptical that Brian was aware of the situation. Interestingly, one of Coinbase’s prominent supporters—Ark Invest and Paul Grewal also divested a significant portion of the company’s shares before the SEC announcement in what appears to be a coordinated move.
Insiders Divested $7.4 Million In Coinbase Stocks In 30 Days
According to data from Dataroma, Brian Armstrong—-Coinbase CEO, sold approximately 90,000 shares for $5.8 million last month. However, nearly half of the sales occurred in the last 24 hours.
Specifically, on March 21, Armstrong divested 30,000 shares for $2.25 million. Armstrong also sold approximately 60,000 Coinbase shares for $3.56 million on March 3 and 15.
Data also shows that he sold the shares when the share price was between $51 and $76. In October 2022, Armstrong committed to divest 2% of his shares from this cryptocurrency exchange.
The Coinbase CEO planned to use the proceeds from the sales to finance scientific development and research efforts in two startups (Research Hub and NewLimit). At the start of the year, the United States financial regulator levied Kraken $30 million for selling unaccredited staking products, fueling rumors that the agency will intensify its scrutiny of cryptocurrency exchanges.
Given Coinbase’s position as a leading cryptocurrency platform in the United States following the FTX.US’s collapse, the regulatory crackdown was inevitable. This explains why Brian sold off his shares early.
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