Alameda Research Sues Grayscale Investments Seeking to Unlock Billions in Value for Shareholders

FTX Debtors and affiliate Alameda Research Ltd. person filed a suit against Grayscale Investments, seeking injunctive alleviation to unlock $9 cardinal successful worth for shareholders of the Grayscale Bitcoin and Ethereum Trusts. The debtors allege that “Grayscale has extracted implicit $1.3 cardinal successful exorbitant absorption fees successful usurpation of the spot agreements.”

FTX Debtors Accuse Grayscale of Exorbitant Management Fees and Breach of Trust Agreements

In a press release issued March 6, 2023, FTX debtors and Alameda Research, the company’s now-defunct quantitative trading firm, announced that Alameda is suing integer currency money manager Grayscale Investments. Alameda seeks injunctive alleviation to let redemptions and trim fees associated with the Grayscale Bitcoin and Ethereum Trusts. The debtors allege that Grayscale and its absorption squad proceed to “breach spot agreements and fiduciary duties.”

Alameda besides argues that Grayscale’s self-imposed redemption prohibition prevents the “realization of astir $9 cardinal of value.” The firm’s CEO and main restructuring officer, John J. Ray III, issued a connection regarding the suit against Grayscale, stating: “We volition proceed to usage each instrumentality we tin to maximize recoveries for FTX customers and creditors.” The FTX debtors restructuring serviceman added:

Our extremity is to unlock worth that we judge is presently being suppressed by Grayscale’s self-dealing and improper redemption ban. FTX customers and creditors volition payment from further recoveries, on with different Grayscale Trust investors that are being harmed by Grayscale’s actions.

The suit against Grayscale follows Alameda’s lawsuit against Voyager Digital astatine the extremity of January 2023. The ailment alleged that Voyager received preferential transfers of spot from Alameda Research, and the steadfast sought to retrieve astir $445.8 cardinal from the bankrupt entity. Voyager agreed to acceptable speech the $445 cardinal to wage Alameda, and some parties agreed to enactment successful nonbinding mediation.

The property merchandise from FTX debtors alleges that for years, Grayscale has “hidden down contrived excuses” to forestall shareholders from redeeming their shares. It besides noted that the Bitcoin Trust (GBTC) has been trading 50% beneath nett plus worth (NAV). GBTC statistic connected Tuesday amusement a existent 42.11% discount to NAV.

“If Grayscale reduced its fees and stopped improperly preventing redemptions, the FTX debtors’ shares would beryllium worthy astatine slightest $550 million, astir 90% much than the existent worth of the FTX debtors’ shares today,” the ailment against Grayscale concludes.

What bash you deliberation volition beryllium the result of the suit against Grayscale Investments? Share your thoughts successful the comments conception below.

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