Since November, Armstrong has been consistently selling off his Coinbase shares.
Brian Armstrong, the Chief Executive Officer and a founding member of Coinbase, parted ways with a portion of his company's shares just a day before the US Securities and Exchange Commission (SEC) hit the crypto exchange with a lawsuit.
In its lawsuit filed on June 6th, SEC claims that Coinbase has been offering unregistered securities and allegedly been operating without the required legal status of a broker, a national securities exchange, or a clearing agency. Thus, the company allegedly evaded the necessary disclosure processes governing securities markets.
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As per SEC data, on June 5th, Armstrong offloaded 29,730 of his company shares.
Since November, Armstrong has been consistently letting go of his Coinbase stocks. These transactions have been taking place under a 10b5-1 plan established in August, which pre-specifies the quantity and timing of trades.
A side-by-side analysis of Coinbase's stock price and Armstrong's transaction dates suggests that his trades have not always resulted in gains. As such, it is plausible that the transaction was scheduled before Armstrong got wind of the impending SEC action. Interestingly, the SEC may have known about Armstrong's transaction algorithm.
The share price of Coinbase took a severe hit on the day of the lawsuit, experiencing a preliminary drop of 20%.
This unexpected and timely action by Armstrong, sidestepping a hefty financial loss, became a hot topic of debate in the Twitter crypto community.
Statistics provided by Dataroma reveal that in the past year, only board members Tobias Lutke and Fred Ehrsam have invested in Coinbase stock among the company's executives.
At the closing hours of June 8th, the Coinbase shares saw a 3.08% increase, retailing for $54.90.
This saga is a reminder of the volatile nature of crypto exchanges and the regulatory scrutiny they face.
