Coinbase Founders, Top Execs Lead COIN Shares Sell Off Ahead Of Spot Bitcoin ETF Deadline

Ehrsam Frederick Ernest III and Brian Armstrong, the founders of Coinbase, the world's largest centralized crypto exchange by trading volume, along with some of its top executives, led the massive sell-off of the company's stock COIN. The sale generated more than $120 million this month alone.

Data gathered by Insider Alerts, an information service that collects and analyzes transactions of insiders on the market, revealed that December seems to be the month when Coinbase insiders are actively selling their shares.

Ernest offloaded more than 450,000 shares in a series of transactions this month. One of these transactions involved the sale of 114,142 shares worth $14.9 million.

Coinbase CEO Armstrong has also been actively selling his COIN shares this month. He has, by far, offloaded 146,150 shares in several transactions for a total amount of $21.6 million.

Coinbase Chief People Officer Brock Lawrence also sold some 104,767 COIN shares worth $18.3 million Wednesday.

Data also showed that Coinbase executives, including CFO Alesia J. Haas, Director Rajaram Gokul, and COO Choi Emilie offloaded millions of dollars worth of shares this month alone.

It is interesting to note that the COIN selling spree by Coinbase's top executives took place at the time when the share's price climbed to $185.2, recording a 450% year-to-date (YTD) increase but is still below its all-time high price of $342.9 in November 2021.

The massive offloading of COIN shares by Coinbase executives happened a few days before the deadline given by the U.S. Securities and Exchange Commission (SEC) to hopeful potential Bitcoin ETF issuers to iron out the details of their applications.

It is worth noting that Coinbase is the named custodian and partner in providing market surveillance of nine spot Bitcoin ETF applicants, which include BlackRock, Fidelity Investments, Galaxy/Invesco, Ark Invest/21Shares, WisdomTree, and VanEck.

This move by Wall Street giants took place a few months after the SEC sued Coinbase for allegedly "operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency" and for "failing to register the offer and sale of its crypto asset staking-as-a-service program."

Gurbir S. Grewal, the Director of the Division of Enforcement for the SEC, said at the time that "Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them. While Coinbase's calculated decisions may have allowed it to earn billions, it's done so at the expense of investors by depriving them of the protections to which they are entitled. Today's action seeks to hold Coinbase accountable for its choices."