The FTX Debtor and its affiliate, Alameda Research Ltd. have filed a lawsuit against Grayscale Investments seeking injunctive relief against the Grayscale Bitcoin and Ethereum Trusts, seeking injunctive relief to extract $9 billion in value for the Trusts’ shareholders. The debtors allege that “Grayscale withdrew more than $1.3 billion in exorbitant management fees in violation of the trust agreement.”
FTX debtors accuse Grayscale of exorbitant management fees and breach of trust agreement
In apress releaseissued on March 6, 2023, FTX’s debtor and its now-defunct quantitative trading firm Alameda Research
announced that Alameda is suing digital currency fund manager Grayscale Investments announced that Alameda seeks injunctive relief to permit redemptions and reduce fees related to the Grayscale Bitcoin and Ethereum Trusts. The Debtors allege that Grayscale and its management “continue to breach the Trust Agreement and their fiduciary duties.”
Alameda also claims that Grayscale’s self-imposed prohibition against redemption is preventing it from “realizing approximately $9 billion in value.” John J. Ray III, the company’s CEO and Chief Restructuring Officer, issued a statement regarding the lawsuit against Grayscale, saying, ” We will use all available means to maximize the recovery for FTX’s customers and creditors.” The FTX’s debtor restructuring officer also stated
Our goal is to unlock the value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption prohibitions; FTX’s customers and creditors, along with other Grayscale Trust investors who have been harmed by Grayscale’s actions, will benefit from additional recovery. would benefit from additional recoveries.
The lawsuit against Grayscale follows Alameda’s filing of a lawsuit against Voyager Digital in late January 2023. The complaint alleged that Voyager received a preferential transfer of assets from Alameda Research and sought to recover approximately $445.8 million from the bankrupt company; Voyager agreed to set aside $445 million to pay Alameda, and the two parties agreed to participate in non-binding mediation.
The FTX debtor’s press release claimed that for years, Grayscale had been “hiding behind artificial excuses” to prevent shareholders from redeeming their shares. They also noted that the Bitcoin Trust (GBTC) is trading 50% below its net asset value (NAV). Tuesday’s GBTC statistics show a current. 42.11% discountto NAV.
“If Grayscale reduced its fees and stopped unduly interfering with redemptions, the FTX Debtors’ shares would be worth at least $550 million, approximately 90% more than the value of the FTX Debtors’ shares today,” the complaint against Grayscale concluded.
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