Brian Armstrong, the CEO of Coinbase, sold $1.8 million worth of company shares on June 5th, according to data from Dataroma. This was just before the U.S. Securities and Exchange Commission (SEC) announced a lawsuit against the company, which caused its shares to drop by over 15% on June 6th. The SEC alleges that Coinbase operated as an unregistered broker, exchange, and clearing agency, and that its staking program qualifies as an unregistered securities offering. Coinbase has stated that it will defend itself in court.

Armstrong sold 29,730 Coinbase shares in eight transactions on June 5th, with the selling prices ranging between $56.70 and $63.79, according to the Dataroma data. Following the announcement of the SEC lawsuit, COIN shares dropped to less than $50, but had slightly recovered to $54.90 at press time, down 3.22% from Armstrong’s least selling price.

Some members of the crypto community raised concerns that Armstrong had prior knowledge of the lawsuit, given the timing of the share sales. However, Fox Business journalist Eleanor Terrett dismissed these speculations, saying the stock sales were pre-planned since August 2022 in compliance with the SEC’s Rule 10b5-1. This rule allows company insiders to establish predetermined plans for selling stock, including details like price, quantity, and date. However, the insiders must certify that they are unaware of nonpublic information.

Terrett added that “setting a sale to happen on the 1st Monday of the month/start of the 3rd fiscal quarter, I’m told, isn’t too unusual.” Furthermore, this recent sale is similar to Armstrong’s previous selloffs. In March, CryptoSlate reported that Armstrong sold 89,196 Coinbase shares for $5.8 million, with almost half of these sales made 24 hours before the U.S. SEC issued a warning to the exchange. The Coinbase CEO also sold $1.8 million worth of the company’s stocks in April.

However, this sales trend began in November 2022 when Armstrong pledged to sell 2% of his stake at the crypto firm to fund scientific research and development through two startups – NewLimit and Research Hub.

Brian Armstrong, the CEO of Coinbase, sold $1.8 million worth of company shares on June 5th, just before news of the SEC lawsuit against the company tanked its shares by over 15% on June 6th. While some members of the crypto community raised concerns that Armstrong had prior knowledge of the lawsuit, others have pointed out that the share sales were pre-planned since August 2022 in compliance with the SEC’s Rule 10b5-1. This recent sale is similar to Armstrong’s previous selloffs, which began in November 2022 when he pledged to sell 2% of his stake at the crypto firm to fund scientific research and development.

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