Coinbase CEO’s $1.8 Million Stock Sale Raises Eyebrows Amid SEC Lawsuit
Summary of the Situation
- Coinbase CEO Brian Armstrong sold $1.8 million worth of company shares on June 5.
- The U.S. Securities and Exchange Commission (SEC) has sued Coinbase for operating as an unregistered broker, exchange, and clearing agency.
- COIN shares dropped more than 15% to less than $50 on June 6.
Coinbase is a leading cryptocurrency exchange based in the United States. The company’s CEO, Brian Armstrong, recently sold $1.8 million worth of company shares on June 5th according to data from Dataroma. These sales occurred before news of the U.S Securities and Exchange Commission (SEC) lawsuit against Coinbase was made public which caused its share price to drop by more than 15% on June 6th to less than $50 as of press time.
Details of the SEC Lawsuit Against Coinbase
The SEC alleges that Coinbase acted as an unregistered broker, exchange, and clearing agency. Additionally, they claim that their staking program qualifies as an unregistered securities offering in violation of securities regulations. In response to these allegations Coinbase has stated that they will defend themselves in court against the SEC charges.
Armstrong’s Stock Sales
Brian Armstong sold 29,730 Coinbase shares in eight transactions on June 5th with selling prices ranging between $56.70 and $63.79 according to Dataroma data which leads some people to question if he had pre-planned his stock sales prior to news breaking about the lawsuit being filed against his company by the SEC .