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A Delaware judge ruled Friday that a shareholder lawsuit alleging insider trading by Coinbase directors can proceed, rejecting a special committee’s recommendation to dismiss the case despite its 10-month investigation clearing the defendants.
The decision affects several high-profile directors, including venture capitalist Marc Andreessen and CEO Brian Armstrong, who collectively sold over $2.9 billion in stock during the company’s April 2021 direct listing.
According to Bloomberg Law, Judge Kathaleen St. J. McCormick allowed the case to proceed due to conflicts involving one committee member, though she acknowledged the internal investigation “paints a compelling narrative” in support of the directors’ defense.
The lawsuit, filed in 2023 by shareholder Adam Grabski, claims directors used confidential valuation information to avoid more than $1 billion in losses by selling shares when Coinbase went public without traditional lockup restrictions.
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