Cathie Wood ARK Invest Sells CRCL Stock Amid Circle Lawsuit

Cathie Wood’s ARK Invest recently offloaded stake in the Circle Internet Group (NYSE:CRCL). The dump comes as the stablecoin issuer faces a lawsuit for failing to freeze $230 million worth of USDC during the Drift Protocol hack.

Cathie Wood’s ARK Dumps Circle Shares

According to data from Ark Invest Tracker on X, the Cathie Wood-led firm offloaded CRCL shares on Friday, April 17. The offloading came via its ARK Next Generation Internet ETF (ARKB). Data shows that the investment firm sold 11,465 CRCL shares worth $1.21 million.

While the amount is not very high, it could indicate at future moves that ensue as Circle faces uncertainty. Also, the selloff is notable ss Ark Invest barely made any moves this week.

The recent sell comes as the USDC issuer Circle is struggling with a class action lawsuit. On Thursday, a class action lawsuit was submitted in the Massachusetts District Court against Circle.

The legal action came on behalf of Drift Protocol users, who suffered massive losses due to the $280 million hack. For further context, law firm Gibbs Mura, with Joshua McCollum as lead plaintiff, filed this suit.

The Circle lawsuit alleges that stablecoin issuer failed to freeze stolen USDC despite its technical capability and contractual authority. However, Circle CEO Jeremy Allaire has justified the move by saying that they didn’t freeze USDC as their was no law enforcement order. Also, he noted that their move aimed at avoiding “moral quandaries.”

“If there are others that believe that Circle should just step away from what the law says and do its own, make its own decisions, I think it’s a very risky proposition,” he said.

CRCL Stock Update

The CRCL share price has dropped amid Cathie Wood’s dump. On Friday, the Circle stock dipped 1.44% and closed at $105.91 in the previous trading session.

Earlier, on Thursday, before the lawsuit news broke, Circle stock recorded gains as CEO Allaire showed confidence around launch of a yuan-backed stablecoin. At the time, CRCL gained 1.84%, closing at $107.46.

Meanwhile, in the after hours of Friday, the CRCL share fell 0.91% to $104.95. However, analysts believe that the stock has shown resilience despite the legal action. It could partly be attributed to the upsurge in global markets as Iran reopened the Strait of Hormuz.