You are here
Home > Cryptocurrency > Coinbase Insiders Sued for Dumping Stock, Saving $1 Billion

Coinbase Insiders Sued for Dumping Stock, Saving $1 Billion

According to a lawsuit filed by an investor, Coinbase Inc. Chairman and Chief Executive Officer Brian Armstrong, board member Marc Andreessen, and other officers avoided more than $1 billion in losses for the company. 

The company executives avoided this loss by using inside information to sell stock within days of the cryptocurrency platform’s public listing two years ago before bad news sent the share price tumbling. When this news came out about Coinbase going public in 2021, the platform’s valuation was $100 billion. 

According to Insurance Journal, the company’s board used a so-called direct listing rather than a more traditional initial public offering to go public. This listing led to a quick selling-off of $2.9 billion in stock. 

However, Coinbase management later revealed “material, negative information that destroyed market optimism from the company’s first quarterly earnings release forward,” according to the complaint unsealed Monday in Delaware Chancery Court.

Also Read: Coinbase To Launch Its Own Ethereum L2 Network ‘Base’ Powered By Optimism

The Immediate Decline in Coinbase’s Shares: 

Coinbase is one of the most popular and only public exchanges available to US citizens. However, the recent crash and decline in this exchange’s market value have made investors and netizens question its standing. 

What massively shocked the community was how Coinbase’s shares lost over $1 billion in value within five weeks. And according to a Coinbase shareholder, Adam Grabski, Coinbase’s market capitalization, which was last $100 billion, fell by more than $37 billion ever since April 2021.

According to the legal complaint against Coinbase, Armstrong sold $291.8 million in Coinbase stock as part of the direct listing, while Andreessen’s venture capital firm, Andreessen Horowitz, sold $118.6 million.

Furthermore, the company’s derivative complaint seeks the return of “ill-gotten gains” from Armstrong and Andreessen, as well as President Emilie Choi, Chief Financial Officer Alesia Haas, former Chief Product Officer Surojit Chatterjee, Chief Accounting Officer Jennifer Jones, and board members Frederick Ersham, Fred Wilson, and Kathryn Haun.

What Is Coinbase?

Coinbase is a well-known cryptocurrency exchange that makes buying, selling, and exchanging Bitcoin simple. Coinbase makes purchasing Bitcoin as simple as purchasing stock through an online stockbroker, but beware of the fees and bad customer service.More About Coinbase: Coinbase Launches A Voter Registration Tool As Part Of A Broader Education Initiative

Related Article  Bitget Introduces the BRC20 Zone and Lists Ordinals (ORDI)

Leave a Reply