According to a report by Bloomberg, Coinbase CEO Brian Armstrong, board member Marc Andreessen, and other officers are being accused of using inside information to avoid more than $1 billion in losses by selling stock within days of the cryptocurrency platform’s public listing two years ago.

The lawsuit, filed by an investor, alleges that the executives had knowledge of bad news that would eventually send the share price tumbling, and sold their shares before the news became public. The lawsuit claims that this constituted insider trading and is seeking damages on behalf of Coinbase investors.

Coinbase Insiders Accused Of Pocketing $1 Billion

Bloomberg reported that Coinbase’s board of directors allegedly used a direct listing instead of a traditional initial public offering (IPO) to sell off $2.9 billion in company stock before management revealed negative information that caused the company’s share price to plummet. The allegations were made in a lawsuit filed by an investor and unsealed on Monday in Delaware Chancery Court.

Related Reading: Australian Crypto Exchange Plans US Expansion, Ignores Regulatory Risk

The use of direct listings has become increasingly popular among tech companies in recent years, as it allows companies to bypass the traditional IPO process and sell shares directly to the public. However, the strategy has also been the subject of criticism, as it can limit the amount of information that is disclosed to investors prior to the sale of shares.

Furthermore, according to Bloomberg, the board of directors allegedly deployed the direct listing strategy to quickly sell off company stock before negative information was publicly disclosed. The investor alleges that Coinbase’s management later revealed “material, negative information” that destroyed market optimism, causing the company’s share price to decrease significantly.

CEO And Board Members Refute Allegations Of Insider Trading

Adam Grabski, an investor who held the company’s shares since April 2021, has cl

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Author: Ronaldo Marquez

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