Ark Investment Management Doubles Down on Coinbase Amidst SEC Lawsuit

Ark Investment Management, the second-largest holder of Coinbase Global (COIN) stock, has increased its investment in the cryptocurrency exchange in response to the Securities and Exchange Commission’s (SEC) lawsuit. The move comes as Coinbase’s share price has plummeted as a result of the regulatory action.

Ark Investment Management Bolsters Coinbase Position

Ark Investment Management has increased its investment in the crypto exchange. Based on Tuesday’s closing price of $51.61, the business purchased an additional 419,324 shares of Coinbase, totaling nearly $21.6 million. Ark’s Innovation ETF (ARKK), Next Generation Internet ETF (ARKW), and Fintech Innovation ETF (ARKF) received the funds. Ark’s first purchase of Coinbase shares since May 3 brings the entire ownership to 11.44 million shares at around $590 million.

SEC Lawsuit against Coinbase

The Securities and Exchange Commission (SEC) has launched a complaint against Coinbase, accusing the business of breaking federal securities laws. The regulatory body claims that Coinbase operated as a broker, exchange, and clearing agency all at the same time without being registered as any of these entities. The Coinbase complaint was filed just one day after a similar suit was brought against Binance, the world’s largest digital asset exchange. At the end of U.S. trading hours on Tuesday, Coinbase’s stock had dropped more than 12%. Despite the setback, Coinbase shares have up more than 50% year to date.

Ark Investment Management’s Belief in Coinbase

Ark Investment Management’s decision to raise its investment in Coinbase despite the SEC action reflects the firm’s unflinching belief in the cryptocurrency exchange’s long-term potential. Ark’s decision, as one of the most important institutional investors in the crypto industry, provides a favorable signal to the market, emphasizing the market’s view that Coinbase will successfully traverse the regulatory obstacles.