A judge in Delaware has decided that a lawsuit accusing several Coinbase
$3.31B
leaders of insider trading can move forward, even though a company review found no wrongdoing.
The case was brought by a Coinbase investor in 2023. It claims that top executives, including CEO Brian Armstrong and board member Marc Andreessen, used private information to avoid major losses when the company went public in 2021.
The lawsuit says insiders sold around $2.9 billion in shares during that time, with Armstrong selling about $291.8 million worth.
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Judge Kathaleen St. J. McCormick of the Delaware Chancery Court refused to dismiss the case on January 30, according to Bloomberg Law.
She said Coinbase’s internal investigation provided a defense but raised doubts about the independence of one committee member who helped conduct the review.
The dispute centers on Coinbase’s decision to go public via a direct listing rather than a traditional IPO. The plaintiff argues this setup gave insiders an unfair chance to sell before prices fell.
Andreessen, through his firm Andreessen Horowitz, is said to have sold about $118.7 million worth of shares. The lawsuit accuses him and other board members of knowing that Coinbase’s valuation was inflated and of selling stock to prevent future losses.
Coinbase and its directors insist there is no proof that they used or acted on confidential company data.
Meanwhile, the US Securities and Exchange Commission (SEC) has officially closed its civil case against Gemini
$275.89M
Trust Company and Genesis Global Capital. What did the agency say? Read the full story.
