A perfectly timed trade 24 minutes before the SEC's big crypto crackdown likely made an investor millions

• This week's crypto-industry crackdown by the SEC has sent the price of Coinbase stock falling.
• Just 24 minutes before the SEC announced its lawsuit against Binance, a trader made a big options trade betting on a stock decline, Bloomberg found.

The great crypto reckoning spearheaded by the SEC this week caused a lot of collateral damage.

As the regulatory authority announced back-to-back lawsuits, first against Binance and then against Coinbase, asset prices pegged to the industry tumbled. Few felt the brunt of the crackdown quite like Coinbase stock itself.

After closing 9% lower Monday after the Binance news, Coinbase shares slipped an additional 21% at intraday lows on Tuesday when its own suit was announced. All told, the stock had plummeted 28% from the prior week's close at its low on Tuesday.

According to a new report from Matt Turner and David Marino at Bloomberg, that played right into the hands of an investor who executed what would turn out to be a highly profitable trade mere minutes before the SEC announced original Binance suit.

The trade breaks down like this, according to data compiled by Bloomberg:

• At 10:36 a.m. on Monday, someone bought a block of 4,806 put contracts with a $50 strike price when the stock was trading at $61.77
• Buying a put is essentially a bet that the share price will fall below that strike price
• The options, which were bought at 18 cents apiece, traded up to nearly $1. If the investor closed their position at the peak, that would've yielded a 460% return, according to Bloomberg
• The price of the options surged to $5.65 each on Tuesday, when Coinbase was slapped with its own suit, and its stock traveled even lower
• Taking into account the initial $86,500 spent to buy the puts, Bloomberg calculates that the trade could've made $2.6 million in less than a day if the investor held on past the first-day dip and closed out at the right time

The potential windfall marks the second suspiciously timed trade in the past couple of weeks. A separate recent Bloomberg analysis found that a shrewd investor made a large options bet that the stock of Equitrans Midstream Corporation would spike just days before a surprise beneficial provision was included in the debt-ceiling deal. Sure enough, the stock did spike, and it looks like the trader made roughly $7.5 million for their efforts.