Crypto venture capital firm Paradigm has purchased additional shares in Coinbase, the popular cryptocurrency exchange operator, for approximately $50 million. The acquisition was disclosed by Paradigm co-founder Fred Ehrsam in a filing with the U.S. Securities and Exchange Commission on Thursday.
Ehrsam, who was also a co-founder of Coinbase from 2012 to 2017 and currently serves as a board director, reported that Paradigm One LP, an entity of Paradigm, bought 810,000 Coinbase shares at an average price of $61 over the course of Tuesday and Wednesday.
Following these transactions, two Paradigm entities, Paradigm One LP and Paradigm Fund LP, now hold a total of 4.5 million Coinbase shares. Additionally, Ehrsam personally owns 1.1 million shares of Coinbase through the Frederick Ernest Ehrsam III Living Trust.
Paradigm’s decision to increase its investment in Coinbase comes amidst the exchange operator’s ongoing legal battle with the Securities and Exchange Commission (SEC). In support of Coinbase’s lawsuit against the SEC, Paradigm filed an amicus brief earlier this week. The VC firm expressed its interest in holding the SEC accountable for its delayed response to Coinbase’s request for rulemaking in the cryptocurrency industry, which has caused uncertainty within the sector.
Coinbase’s complaint regarding the SEC’s application of securities laws to digital assets has led the court to order the SEC to respond by next week. The outcome of this legal dispute will have significant implications for the regulation of cryptocurrencies in the United States.
Paradigm’s continued investment in Coinbase demonstrates its confidence in the exchange operator’s long-term prospects despite the ongoing regulatory challenges it faces. As a prominent player in the crypto venture capital space, Paradigm’s support for Coinbase further strengthens the exchange’s position in the industry.
