What happened
Shares of Coinbase Global (COIN 7.41%) fell as much as 6.2% in trading on Wednesday as investors sold the crypto sector overall. Shares were down 3.7% at 3 p.m. ET and look like they'll likely close the day lower.
So what
Cryptocurrencies are generally down today with some like Solana and Polygon dropping nearly 5%. When the crypto market falls, it's not uncommon to see Coinbase drop as well.
NASDAQ: COIN
Key Data Points
The more troubling report was an academic study published by SSRN that accuses Coinbase insiders of earning $1.5 million in trading profits from insider trading. The company has already seen one person be charged with insider trading, so a widening legal problem wouldn't be welcome by Coinbase. It's unclear what the outcome of this study will be, but it's not a great headline today.
Now what
It's worth keeping an eye on the insider trading investigations, but at this point there's nothing to indicate that Coinbase as a company did anything wrong. That could change, of course.
The decline in cryptocurrencies isn't necessarily a bad thing either. Coinbase makes money on transactions, not just the value of cryptocurrencies, so the company is still well positioned for when the market recovers. As I highlighted earlier this week, Coinbase is building new features despite the crypto winter, and that's all investors can ask for long term.
