• Coinbase shares were hit hard this week after the SEC sued the crypto exchange.
• CEO Brian Armstrong sold 29,730 shares of the company a day ahead of the SEC’s complaint prompting many to question if it had anything to do with insider trading.
• Fox Business journalist says that sale was perfectly legal and initiated in August 2022 according to SEC filings database.
SEC Sues Coinbase
Shares of Coinbase Global Inc were hit hard this week after the SEC sued the crypto exchange. This has caused a 35% decrease versus their YTD high.
Brian Armstrong’s Pre-Planned Sale
CEO Brian Armstrong sold 29,730 shares of the company only a day ahead of the SEC’s complaint prompting many to question if it had anything to do with insider trading. However, Fox Business journalist Eleanor Terret reported that it was a perfectly legal sale as it was planned even before Coinbase was served a “Wells Notice“. The sale had been initiated in August 2022 according to the SEC filings database and intended to comply with Rule 10b5-1(c).
Ethereum Withdrawals Spike
The lawsuit resulted in an increase in Ethereum withdrawals at Coinbase this week. Despite this, some members of the crypto community remain unhappy about Brian Armstrong’s pre-planned stock sale due to its „lack of loyalty“ or „lack of confidence.“
It remains uncertain whether or not such comments will make Coinbase CEO adjust his plans for future share sales. Nonetheless, many are still questioning whether or not Brian Armstrong did anything illegal when selling his shares prior to news breaking about the SEC lawsuit against Coinbase.
Though Brian Armstrong’s stock sale is believed by some sources to be perfectly legal, its timing has raised questions about possible insider trading on behalf of the CEO prior to news breaking out aboutCoinbase being served a “Wells Notice” from securities regulators and subsequently being sued by them afterwards.