(Bloomberg) -- Cathie Wood said Ark Investment Management’s sale of some of its Coinbase Global Inc. holdings last month came after what the firm viewed as regulatory “uncertainty” in the cryptocurrency world.

Three of the firm’s exchange-traded funds sold slightly over 1.41 million shares on July 26, which were worth about $75 million at the time, according to Ark’s daily trading data compiled by Bloomberg. The firm made the trade a few days after the Securities and Exchange Commission deemed some tokens listed on Coinbase’s platform as securities, Wood, the head of Ark said in Bloomberg TV interview Monday.

It was unclear how many tokens Coinbase would have to delist if it didn’t register them with regulators, or how the exchange’s business model would change if it did register them, Wood said. Shopify Inc. had also fallen, so Ark “swapped” some Coinbase shares with Shopify, she said.

Federal prosecutors at the time had also brought an insider trading case against a former Coinbase employee. Wood said that was not behind her fund’s decision to sell. Coinbase has rallied over 80% since Ark trimmed its holdings. The firm still owns about 7.1 million shares of the crypto exchange, making it one of the biggest holders of the stock.

Ark’s funds have been on volatile rides this year as Federal Reserve rate hikes battered growth stocks. The firm last month said it will shut down its Transparency ETF (CTRU), the first time it’s pulled the plug on a fund. The product tracked an index that shunned industries including alcohol, gambling, oil and gas, but it wasn’t explicitly labeled as an ESG fund.

Wood said her firm’s investments are “focused on doing the right thing” and are intrinsically good for the environment, but the boom in ESG-labeled investment products has gotten “way out of hand,” and “there was a lot of slapping lipstick on a pig.” 

The Ark CEO said the US economy is already in a recession and that the Fed will have to start loosening its policy some time next year. Her firm will stay fully invested throughout the downturn in “innovation,” as companies in that space will thrive in difficult times, she said.

Shares of the Ark Innovation fund rose 1.5% to $50.80, while Coinbase increased 5.3% to $98.02 as of 4 p.m. in New York. 

(Updates with details on Coinbase holdings in the fourth paragraph.)

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