Funds controlled by Cathie Wood dumped shares of Coinbase Global as the exchange faces a probe from the Securities and Exchange Commission.

Three Ark Investment Management funds sold slightly over 1.41 million shares, which amounted to roughly $75 million, according to Ark’s daily trading data. Meanwhile, Ark’s flagship Innovation exchange-traded fund (ETF) sold 1.13 million shares. 

Earlier this week, the firm’s Coinbase stock lost about a fifth of its value, upon the announcement of the SEC’s probe. Up until the end of June Ark had been the exchange’s third largest shareholder, retaining about 8.95 million shares.

While Ark has largely been buying shares of the exchange since its debut in 2021, this sale marks the first time it has sold any this year.

Since Dec, Ark Investment Management has lost nearly half of its assets under management. Additionally, its flagship Ark Innovation ETF has plunged nearly 50% so far this year.

Wood has been forced to close one of her exchange-traded funds for the first time ever. Monetary tightening around the globe seems to have capped growth stock valuations, while some fear it could tip the economy into a recession. 

Earlier this week, the SEC launched a probe against Coinbase, investigating whether tokens the exchange has been allowing Americans to trade should actually be registered as securities. 

As the largest cryptocurrency exchange in the U.S., over 150 tokens are available to Americans on Coinbase. However, if the SEC deems them securities, the company may be compelled to register as an exchange with the authority.

Coinbase’s Chief Legal Officer Paul Grewal said on Twitter, “We are confident that our rigorous diligence process – a process the SEC has already reviewed – keeps securities off our platform, and we look forward to engaging with the SEC on the matter.” 

Also this week, Coinbase petitioned the SEC to clarify regulations surrounding the trading of digital assets, asking it to provide rules to identify which digital assets it considers to be securities.

And last week, a former Coinbase product manager was indicted for insider trading.

The post Ark Invest Dumps Coinbase Stock Amid SEC Probe appeared first on BeInCrypto.

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