Coinbase CEO Brian Armstrong, Other Top Brass Sued For Dumping Stocks, Avoiding $1 Billion In Losses

"We are at times the target of frivolous litigation," Coinbase issued a statement.

Armstrong (pictured), board member Marc Andreessen, and other Coinbase insiders were named in the lawsuit.

Source : Getty

According to a lawsuit filed by an investor, Coinbase Inc.'s Chairman and Chief Executive Officer Brian Armstrong, board member Marc Andreessen, and other officers avoided over $1 billion in losses by using inside information to sell stock within days of the cryptocurrency platform's public listing two years ago. As reported by Bloomberg, the complaint alleged that the company's board utilised a direct listing and rapidly sold off $2.9 billion in stock before Coinbase management later disclosed "material, negative information that destroyed market optimism from the company's first quarterly earnings release forward."

This action allowed them to save $1 billion before the share price plummeted due to bad news.

Adam Grabski, who said he's held Coinbase shares since April 2021, claimed that "Within five weeks, those shares declined in value by over $1 billion, and Coinbase's market capitalization plummeted by more than $37 billion." Armstrong sold $291.8 million of Coinbase stock as part of the direct listing, while Andreessen's venture capital firm, Andreessen Horowitz, dumped $118.6 million worth of the stock, according to the complaint.

Coinbase issued an emailed statement claiming, "As the most popular and only publicly traded crypto exchange in the US, we are at times the target of frivolous litigation. This is an example of one of those meritless claims."

The so-called derivative complaint filed on the company's behalf is seeking the return of "ill-gotten gains" from Armstrong and 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.

The case is Grabski derivatively on behalf of Coinbase Global Inc. v. Andreessen, Case No. 2023-0464-KSJM, Court of Chancery, State of Delaware.

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