Cathie Wood's Ark Invest Buys More Circle Despite Growing Scrutiny

• Ark Invest bought $13.7M in Circle shares despite a stock slump and rising stablecoin competition.
• Circle secured OCC approval for a national trust bank, strengthening its USDC custody framework.
• Legal scrutiny grows as Circle disputes claims it failed to help recover funds linked to crypto scams.

Cathie Woods Ark Invest bought nearly $14 million worth of Circle Internet Group shares on Thursday, adding to its stake in the stablecoin issuer despite mounting pressure on the company. At the same time, the investment firm sold almost $10 million worth of Robinhood shares as part of its routine portfolio rebalancing.

The purchase comes as Circle faces a difficult stretch. The USDC issuer‘s stock has been under pressure, competition in the stablecoin market is increasing, and the company is dealing with fresh allegations over its cooperation with law enforcement. Even so, Ark’s latest investment signals it still sees long-term value in the company.

Ark Adds Circle Despite Recent Stock Decline

Ark Invest bought 217,896 Circle Internet Group shares through its ARKK, ARKW, and ARKF exchange-traded funds. Based on Thursdays closing price of $63.01, the purchase was worth about $13.7 million.

The investment came as Circles shares continued to struggle. The stock fell 1.65% on Thursday and is down more than 20% over the past month as competition in the stablecoin market has intensified following the launch of Open USD (OUSD), a new initiative backed by more than 140 companies, including Visa, Mastercard, BlackRock, and Coinbase.

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Even with the recent decline, some Wall Street analysts remain optimistic. Earlier this month, Bernstein reiterated its Outperform rating on Circle and maintained a $190 price target, signaling confidence in the companys longer-term outlook.

Alongside the Circle purchase, Ark trimmed its Robinhood position, selling 85,319 shares worth about $9.8 million. Robinhood shares rose 1.39% to close at $115.11 on Thursday.

OCC Approval Marks Major Milestone

Separately, Circle recently received final approval from the U.S. Office of the Comptroller of the Currency to establish Circle National Trust. The federally regulated trust bank will allow the company to expand its digital asset custody services and could eventually manage reserves backing its USDC stablecoin.

Circle co-founder and Chief Executive Jeremy Allaire called the approval an important milestone for the company, saying it “marks a defining step in bringing blockchain technology and digital assets into the core of the U.S. financial system.”

Legal Scrutiny Adds New Challenges

Despite its regulatory progress, Circle is facing fresh scrutiny over how it handled cases involving stolen cryptocurrency.

According to a report by the International Consortium of Investigative Journalists, some law enforcement officials accused the company of not doing enough to help scam victims recover stolen funds. Prosecutors in Wisconsin also alleged that Circle failed to comply with a warrant related to stolen assets. Circle has disputed the allegations, calling the complaint meritless.

Related: Robinhood Chain Scam Tokens Trigger Wallet Concerns as Relay Confirms User Funds Lost