• The U.S. Securities and Exchange Commission accused Coinbase of not registering properly and prioritizing profits over investor interest, causing its stock (COIN) to plummet 13%.
• ARK Invest CEO Cathie Wood holds a significant amount of shares in Coinbase, so she is now facing serious challenges due to the SEC’s allegations against the crypto exchange.
• Regulatory uncertainty may push innovation out of the U.S., which could become an election-year issue.
SEC Accuses Coinbase
The U.S. Securities and Exchange Commission (SEC) has accused Coinbase of not properly registering within U.S. regulatory laws, as well as prioritizing profits over investor interest and generating millions of dollars based on “ill-will” mechanisms that break regulatory constraints. As a result, Coinbase COIN stock has plummeted about 13%.
Cathie Wood’s Risky Investment
ARK Invest CEO Cathie Wood has invested much money and faith in the U.S crypto exchange Coinbase, holding 11 million shares of COIN stock across her funds – making it third in weight across all her funds – potentially creating a disaster for ARK Invest if COIN continues to lose value following this regulatory hell.
The SEC has always been unreasonably harsh on crypto companies and creates confusing regulations that often make innovation difficult or impossible within the US borders, pushing it towards more friendly regimes instead..
Election Year Issue?
Cathie Wood recognizes this potential problem with American regulation, suggesting that it may become an election year issue due to its potential impact on innovation and development within the US economy.
While no further statements have been made from either Cathie Wood or ARK Invest regarding these allegations against Coinbase, investors should be wary of any changes in sentiment surrounding the company or other crypto exchanges given their potential impact on markets outside of cryptocurrency itself.