Michael Burry, the famous investor and founder of investment firm Scion Asset Management, best known for first predicting the 2008 housing market crash and for the “The Big Short” book and movie, recently shared his views on another topic.
Notably, the U.S. Securities and Exchange Commission (SEC) is investigating the crypto exchange Coinbase (NASDAQ: COIN) for the possible offering of unregistered securities.
In response to a story published by Bloomberg titled “Coinbase Faces SEC Probe on Crypto Listings,” Burry commented n the article in a tweet on July 26:
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“Pretty sure the SEC does not have the resources or the IQ points to do this correctly.”
The big investigation
On July 25, it was reported that the SEC is investigating Coinbase and whether the platform is offering unregistered securities. This comes just days after the securities commission announced insider trading charges against a former crypto exchange manager.
Shares of Coinbase closed down more than 21% on Tuesday following the news about the investigation. Furthermore, Coinbase stock has lost more than 75% of its value this year.
Promptly, Coinbase opposed the allegations made by SEC that it listed crypto securities. Paul Grewal, chief legal officer at crypto exchange platform tweeted Monday:
“I’m happy to say it again and again: we are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter.”
It seems that the latest developments are not in favor of Coinbase. Namely, a Twitter user who goes under the handle Cobie tipped off authorities which led to the arrest of three people connected to the crypto exchange platform. Cobie indicated that the crypto exchange might be more at fault for the entire situation than it appears at first glance.
The next bubble
Michael Burry has warned the investors before about the possible market collapse and crypto market corrections. Through his investment company Scion Asset Management, Burry recently positioned his portfolio for the upcoming volatility.
In a now-deleted tweet from October 2021 Burry said: “I believe that cryptocurrencies are in a bubble.”
Finally, ‘The Big Short’ investor did warn that inflation will come in 2022, and he predicted it correctly; however, no one has a crystal ball, and basing investments on someone else’s research always comes with its own risks.
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