Coinbase insiders appear to have little faith that their company will be worth more in the future than it\u2019s worth right now, a stance that should concern anyone who bought shares in the cryptocurrency exchange in 2021.<\/p>\n
Public filings reveal that, as of January 6, Coinbase insiders had issued 703 sell orders worth a combined $5,796,792,858 since the company\u2019s direct listing on the Nasdaq exchange last April. Over that same period, no insider purchased even a single additional share of Coinbase. Not one. Nada. Zip. Zilch. Zero.<\/p>\n
Leading this sell-off tsunami was Frederick Wilson, a prolific financier of technology startups, who cashed out a total of just over $1.8 billion on April 16. A division of Union Square Ventures, a fund Wilson co-founded with Brad Burnham, sold an identical sum the same day.<\/p>\n
Third on the exit ramp was Ehrsam Frederick Ernest III, co-founder of both Coinbase and crypto investment firm Paradigm, who has steadily unloaded over $492 million since last April. Fourth was Marc Andreessen with over $311 million in personal sales, although three affiliated funds\u2014Andreessen Horowitz LSV ($122.6 million), a16z ($122.6 million) and AH Equity Partners III ($118.6 million)\u2014were also significant sellers.<\/p>\n
As for Coinbase\u2019s executive branch, President Emilie Choi sold $235.5 million of her holdings as of January 6, while Chief Product Officer Chatterjee Surojit wasn\u2019t far behind with $172.2 million. Chief Financial Officer Alessia Haas was a little further down the list with $99.3 million.<\/p>\n
Director Katie Haun, who recently left her role as an a16z general partner to form her own crypto VC fund, sold over $82 million of her Coinbase shares. Chief Legal Officer Paul Grewal ($64.8 million) and Chief Accounting Officer Jennifer Jones ($50 million) rounded out the insider sales chart. Since August 18, all insider sales have been limited to Choi, Ehrsam, Grewal, Haun, Jones and Surojit.<\/p>\n
The other FOMO (fear of Miami outcome)<\/strong><\/p>\n While in most cases the sales listed above don\u2019t represent the entirety of the principals\u2019 stakes in Coinbase\u2014with the notable exception of Haun, who appears to have sold off nearly 95% of her holdings\u2014it\u2019s worth considering that Coinbase\u2019s retail investors likely haven\u2019t been as fortunate as those who had buckets to sell on day one.<\/p>\n After charging out the Nasdaq gate amidst a flood of media attention, Coinbase shares lost nearly half their opening day price of $381 by mid-May. Since then, the shares have ebbed and flowed with the fickle fiat value of major crypto tokens, briefly topping $357 during last November\u2019s bubble before crashing once again, closing out last week\u2019s trading at just over $232.<\/p>\n Haun\u2019s near-total divestiture stands in stark contrast to quotes she gave to TechCrunch at the time of Coinbase\u2019s listing. Then, Haun said Coinbase was \u201cvery well-positioned \u2026 to capitalize on all kinds of different behaviors in the crypto economy that we don\u2019t even yet know about.\u201d Despite Coinbase allegedly sitting in crypto\u2019s catbird seat, Haun apparently saw less value in sitting on her shares than selling.<\/p>\n Haun sold her final tranche of Coinbase shares on November 23, the day before the jury in the Kleiman v Wright civil trial began their deliberations. That Florida trial, which Ira Kleiman brought based on the claim that his brother Dave helped Wright create and mine Bitcoin, resulted in a win for Wright as the jury declared that Dave Kleiman hadn\u2019t played a major role in Bitcoin\u2019s creation.<\/p>\n As a Coinbase director, Haun would have been well aware that the \u2018material risk\u2019 section of the company\u2019s Nasdaq prospectus stressed the danger that the exchange could face if the world discovered the real-world identity behind the Satoshi Nakamoto pseudonym credited with authoring the 2008 Bitcoin white paper. Over $164m of Coinbase stock was sold off by insiders during the trial. Just saying.<\/p>\n Live long and profit<\/strong><\/p>\n Coinbase CEO Brian Armstrong has so far unloaded nearly $292 million worth of his company holdings, although those sales were conducted the same week the exchange made its Nasdaq debut. Armstrong used some of the proceeds shortly before Christmas to buy a $133 million mansion in Los Angeles (the gates to which probably now feature signage reading \u2018not your keys, not your house\u2019).<\/p>\n Armstrong\u2019s sales represent a tiny fraction of his holdings in the company he co-founded, and perhaps he figures that if Coinbase ever went truly south, he\u2019ll still have loads of time in which to start over. Just before Christmas, Armstrong announced the formation of a new company, NewLimit, that aims to \u201cradically extend human healthspan\u201d through something called \u2018epigenetic reprogramming.\u2019<\/p>\n Lest anyone stop to marvel at the idea of a tech bro suddenly embracing altruism, NewLimit\u2019s co-founder Blake Bryce reassured potential investors that the start-up was focused on becoming \u201can ambitious, well-run, for-profit company that will deliver revenue-generating products.\u201d Maybe some of Coinbase\u2019s early retail investors who avail themselves of NewLimit\u2019s technology might live long enough see their Coinbase shares regain their original value someday. But we doubt it.<\/p>\n