What happened
Shares of Coinbase Global (COIN 4.68%) 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.
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.
