Cathie Wood Picks Up Huge Stake In Coinbase Even As Crypto Platform Faces Off Against SEC In Rulemaking Battle

Cathie-Wood led ARK Investment Management loaded up on shares of cryptocurrency exchange platform Coinbase Global Inc COIN.

What Happened: Wood’s ARK Investment Management purchased the Coinbase shares on a day when the company filed a narrow action in federal court to compel the Securities and Exchange Commission (SEC) to use its formal rulemaking process to provide guidance for the crypto industry.

Funds managed by ARK bought over 157,000 shares of Coinbase valued at over $8.59 million based on Monday's closing price. The purchase was done via the ARK Innovation ETF ARKK, ARK Next Generation Internet ETF ARKW and the ARK Fintech Innovation ETF ARKF.

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Legal Action: Coinbase said in its blog that if the SEC says no to its rulemaking petition, then Coinbase would be allowed to challenge that decision in court and explain in that formal setting why rulemaking is required.

"So it's important for the SEC and any other agency petitioned for rulemaking to respond to the petition once the agency has made up its mind, especially if the answer is no — otherwise the public can never exercise its right to ask a court if the agency's decision was proper," it said.

The company stated that from the SEC's public statements and enforcement activity in the crypto industry, "it seems like the SEC has already made up its mind to deny our petition."

Coinbase said rulemaking process is a critical step and until the crypto industry gets that clarity, it will continue to take every step available. "Our decision to move forward with today's legal challenge is our attempt to compel basic rulemaking. It shouldn't have come this — but it has, and we will see it through to its conclusion," it noted.

Coinbase shares ended 7.27% lower on Monday and have lost over 22% in last five days, potentially making it a suitable candidate for bottom-fishing.

Major Sale: ARK sold over 498,000 shares of Shopify Inc SHOP at an estimated valuation of over $23.9 million based on Monday's closing price. ARK clarified that the sale was to comply with the asset diversification test required to qualify as a registered investment company under the Internal Revenue Code.

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