When GBTC sees the flow of money, Alameda Research will fight with Grayscale
Alameda Research dropped its lawsuit against Grayscale Investments. The suit, filed in March 2023, seeks injunctive relief against FTX's debtors' practices that are suppressing the value of assets.
Alameda Research's suit seeks an injunction against management fees for breach of trust agreements. At the time of the lawsuit, these payments totaled more than $1.3 billion. The lawsuit also notes that Grayscale has a “self-imposed redemption ban” that discourages shareholders from buying shares in Grayscale Bitcoin (GBTC) and Ethereum Trusts.
“If Greyscale reduces its fees and stops improperly defending redemptions, FTX's debtors' shares would be worth at least $550 million, 90% more than the value of FTX's debtors' shares today,” FTX said in a statement at the time. The presentation.
Grayscale CEO Michael Sonnenschein said the 1.5% management fee for Grayscale Bitcoin Trust is justified by the company's “size, liquidity and track record” https://t.co/l9cEzqr2F6
— Bloomberg Crypto (@crypto) January 20, 2024
Grayscale CEO Michael Sonnenschein is also named in the lawsuit, along with parent company Digital Currency Group (DCG) and CEO Barry Silbert. Silbert stepped down from Greyscale's board in December. A spokesperson for Greyscale told Cointelegraph in a January 22nd written statement:
“We are pleased to confirm that Alameda Research, an FTX-affiliated hedge fund, has voluntarily dismissed its lawsuit against Greyscale. Alameda's voluntary dismissal underscores the grayscale position that this legal action is completely futile.
GBTC was converted into a spot exchange-traded fund (ETF) on January 10 after receiving approval from the United States Securities and Exchange Commission. The management fee of 1.5% is high compared to its competitors.
Related: Greyscale CEO Warning: Only Two or Three Place Bitcoin ETFs Are Here to Stay
GBTC has seen significant inflows since its conversion to a spot ETF, reducing assets under management by $5 billion to $23.7 billion on January 18, bucking the upward trend of most other Bitcoin (BTC) ETFs.
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