The collapsed cryptocurrency exchange FTX conglomerate, which comes as a new twist in the ongoing bankruptcy case, announced today that one of its debtor affiliates, Alameda Research, has filed a lawsuit against Grayscale Investments in the Delaware State Supreme Court. In addition, FTX debtors filed suit against Grayscale’s Chief Executive Officer, Michael Sonnenshein, and Grayscale’s owners, Digital Currency Group (DCG) and Barry Silbert.
Interesting lawsuit from Alameda against Grayscale: Exorbitant management fee!
FTX borrowers are seeking injunctive relief to release $9 billion or more in value for shareholders of Grayscale Crypto Trusts and over $250 million in asset value for clients and creditors of FTX borrowers. Accordingly, according to the lawsuit filed by Alameda, according to Alameda’s complaint, Grayscale received exorbitant management fees for the management of Grayscale Bitcoin and Ethereum trusts. Moreover, Alameda accuses Grayscale of allowing its shares to be traded at a discount by almost half of their net worth.
The lawsuit was filed in Chancery Court in Delaware. There are also claims against Grayscale CEO Michael Sonnenshein and Grayscale’s owner, Digital Currency Group (DCG), and its CEO Barry Silbert.
“Our shares could have been worth 90 percent more!”
The lawsuit alleges that FTX debtors’ shares would be worth at least $550 million, or roughly 90% more than their current value, if Grayscale cuts its fees and allows redemptions. John J. Ray III, CEO and head of restructuring, FTX Borrowers, said:
We will continue to use every tool we can to maximize refunds for FTX customers and creditors. Our goal is to unlock value that we believe is currently suppressed by Grayscale’s prohibition of self-trading and improper redemption.
John J. Ray III also noted that FTX customers and creditors will benefit from additional recoveries, as well as other Grayscale Trust investors who have been harmed by Grayscale’s actions. The complaint continues with the allegation that Grayscale hid behind various fabricated statements for many years to prevent shareholder buybacks.
Cryptocurrency company: Plaintiffs misled!
A spokesperson for Grayscale, on the other hand, described the case as “misguided”. In addition, the spokesperson said, “Grayscale has been transparent in its efforts to obtain regulatory approval to convert GBTC into an exchange-traded fund. “This is a result that is without a doubt the best long-term product structure for Grayscale’s investors.”
Meanwhile, as you follow on Kriptokoin.com, Grayscale will challenge the SEC’s decision to reject Grayscale’s application to convert GBTC to an ETF in a hearing before the DC Court of Appeals on Tuesday.
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