Coinbase Insider Trading Lawsuit Against Executives Moves Forward
By John Nada·Jan 31, 2026·2 min read
A Delaware judge allows a lawsuit against Coinbase directors for insider trading to proceed, despite prior clearance from an internal investigation.
A Delaware judge has allowed a shareholder lawsuit accusing several Coinbase directors of insider trading to proceed, despite an internal investigation that cleared the executives of wrongdoing. The case, filed by a Coinbase shareholder in 2023, alleges that directors, including CEO Brian Armstrong and board member Marc Andreessen, used confidential information to sidestep over $1 billion in losses by selling shares around the company’s public debut in 2021. Insiders reportedly sold more than $2.9 billion worth of stock, with Armstrong personally offloading about $291.8 million.
Delaware Chancery Court Judge Kathaleen St. J. McCormick rejected a request to dismiss the suit, acknowledging that while the committee’s findings present a strong defense for the directors, questions surrounding the independence of one committee member were enough to keep the case alive. The claims center on Coinbase’s decision to go public via a direct listing, which allowed existing shareholders to sell immediately without a lockup period.
According to the lawsuit, Andreessen sold roughly $118.7 million in shares through his venture firm, Andreessen Horowitz. The plaintiff asserts that the directors knew Coinbase’s valuation was inflated and sold stock to avoid losses. Coinbase and the defendants have denied the allegations, claiming no evidence supports that they acted on material nonpublic information. Coinbase expressed disappointment over the court's decision and plans to continue contesting the claims.
New allegations of insider trading have emerged, suggesting that certain traders may have profited from advance knowledge of token listings on Coinbase. The exchange intends to revise its token listing process to mitigate information leaks. This ongoing legal battle underscores the scrutiny Coinbase faces regarding its governance and operational transparency.