TechFlow news, cryptocurrency news website Cryptoslate recently reported that data from Dataroma shows Coinbase CEO Brian Armstrong sold company shares worth $1.8 million on June 5.
The sales have drawn attention from the crypto community, with concerns that Armstrong may have had prior knowledge of litigation involving the company.
However, Fox Business journalist Eleanor Terrett noted that under U.S. Securities and Exchange Commission (SEC) Rule 10b5-1, pre-planned sales like this have been legal since August 2022.
According to Investopedia, corporate insiders can use Rule 10b5-1 to establish predetermined stock sale plans, specifying details such as price, volume, and timing.
However, insiders must demonstrate they did not possess any material non-public information at the time the sale plan was created.
This sale is similar to previous transactions by Armstrong, who in March sold 89,196 shares of Coinbase stock for $5.8 million.
At that time, nearly half of the sales were completed within 24 hours before the SEC issued a warning letter to the exchange.
