Coinbase executives and board members avoided more than $1 billion in losses 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, according to a lawsuit filed by an investor.
The board used a so-called direct listing instead of a more typical initial public offering and rapidly sold off $2.9 billion in stock before management later revealed “material, negative information that destroyed market optimism from the company’s first quarterly earnings release forward”, Adam Grabski said in the lawsuit.
The complaint was unsealed on Monday in the Delaware Chancery Court.
“Within five weeks, those shares declined in value by over $1 billion, and Coinbase’s market capitalisation plummeted by more than $37 billion,” said Mr Grabski, who said he has held Coinbase shares since April 2021.
Coinbase chairman and chief executive Brian Armstrong sold $291.8 million of the platform's stock as part of the direct listing, according to the complaint, while board member Marc Andreessen’s venture capital company, Andreessen Horowitz, dumped $118.6 million worth of the stock.
“As the most popular and only publicly traded crypto exchange in the US, we are, at times, the target of frivolous litigation,” Coinbase said in an emailed statement.
“This is an example of one of those meritless claims.”
The “derivative” complaint filed on the company’s behalf seeks the return of “ill-gotten gains” from Mr Armstrong and Mr Andreessen, along with president Emilie Choi, chief financial officer Alesia Hass, chief accounting officer Jennifer Jones, former chief product officer Surojit Chatterjee and board members Frederick Ersham, Fred Wilson and Kathryn Haun.
A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
