Fresh trouble brews in for Coinbase as a lawsuit alleges that top leadership of the crypto exchange sold stock using inside information and dodged massive losses.
Coinbase&#8217;s Chief Executive Officer Brian Armstrong, board member Marc Andreessen, and other officers are being accused of avoiding losses of over $1 billion with the help of inside information to sell stock within days of the platform&#8217;s public listing in 2021.
<ul>
<li>The investor Adam Grabski, who filed the lawsuit, alleged that the firm&#8217;s management offloaded their stock before &#8220;material, negative information that destroyed market optimism from the company’s first quarterly earnings release forward&#8221; prompted a decline in the share price.</li>
<li>The complaint was unsealed Monday in Delaware Chancery Court, which stated that Coinbase&#8217;s board launched a direct listing instead of a more typical initial public offering and rapidly sold off $2.9 billion in stock.</li>
</ul>
<blockquote>&#8220;Within five weeks, those shares declined in value by over $1 billion, and Coinbase&#8217;s market capitalization plummeted by more than $37 billion.&#8221;</blockquote>
<ul>
<li>As part of the direct listing, Armstrong is said to have sold more than $291 million of Coinbase stock.</li>
<li>Andreessen’s venture capital firm, Andreessen Horowitz, on the other hand, dumped over $118 million worth of the stock during the same period, according to the complaint.</li>
<li>In an emailed <a href="https://www.bloomberg.com/news/articles/2023-05-02/coinbase-insiders-avoided-1-billion-in-stock-losses-suit-says" target="_blank" rel="noopener" data-wpel-link="external">statement</a> to Bloomberg, Coinbase said the lawsuit is an example of &#8220;meritless claims.&#8221;</li>
<li>The lawsuit emerges a month after the US Securities and Exchange Commission (SEC) <a href="https://cryptopotato.com/sec-issues-wells-notice-against-coinbase-for-listing-unregistered-securities/" target="_blank" rel="noopener" data-wpel-link="internal">sent</a> a Wells Notice to Coinbase for listing unregistered securities.</li>
<li>Tensions have been escalating with the regulator for quite some time.</li>
<li>The NASDAQ-listed firm <a href="https://cryptopotato.com/sec-issues-wells-notice-against-coinbase-for-listing-unregistered-securities/" target="_blank" rel="noopener" data-wpel-link="internal">retaliated</a> with its own lawsuit against the SEC, asking a federal court to compel the SEC to provide clearer guidance on the rules governing the crypto market.</li>
</ul>
The post <a href="https://cryptopotato.com/coinbases-top-management-accused-of-dumping-millions-to-avert-losses-using-insider-trading/" rel="nofollow">Coinbase&#8217;s Top Management Accused of Dumping Millions to Avert Losses Using Insider Trading</a> appeared first on <a href="https://cryptopotato.com/" rel="nofollow">CryptoPotato</a>.

Coinbase’s Top Management Accused of Dumping Millions to Avert Losses Using Insider Trading

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