Grayscale Investments has successfully dismissed a lawsuit from Alameda which sought to prevent the collection of management fees.
Grayscale Investments has dismissed the lawsuit pursued by Alameda Research. In the lawsuit, which was submitted in March 2023, the plaintiffs sought injunctive relief against practices that they alleged were reducing the value of the assets held by FTX debtors.
Alameda Research filed the lawsuit with the goal of obtaining a court order to prohibit the collection of management fees that violated trust agreements.
During the time that the lawsuit was submitted, the total sum of those fees exceeded $1.3 billion. Additionally, the lawsuit asserted that it maintains a “self-imposed redemption ban” that inhibits stockholders from redeeming shares in the Grayscale Bitcoin (GBTC) and Ethereum Trusts.
“The FTX Debtors’ shares would be worth at least $550 million if Grayscale reduced its fees and stopped improperly preventing redemptions,” FTX said in a statement at the time of filing.
This is nearly 90 percent more than the existing value of the FTX Debtors’ shares, which is currently at $550 million. Grayscale’s Chief Executive Officer Michael Sonnenshein was also mentioned in the complaint, as were the parent business, Digital Currency Group (DCG), and its Chief Executive Officer, Barry Silbert.
As of December, Silbert has resigned from his position on the Grayscale board. The following is what a spokesperson said in a written response on January 22:
“We are pleased to confirm that Alameda Research, FTX’s affiliated hedge fund, has voluntarily dismissed its lawsuit against Grayscale. Alameda’s voluntary dismissal underscores Grayscale’s position that this legal action was entirely without merit.”
On January 10, the United States Securities and Exchange Commission authorized the transformation of GBTC into a spot exchange-traded fund (ETF).
In comparison to its rivals, its management charge of 1.5% is still considered to be quite excessive.
Since its conversion to a spot exchange-traded fund (ETF), GBTC has had significant withdrawals, resulting in a decrease in assets under management of about $5 billion, reaching $23.7 billion on January 18.
This contrasts with the increasing trend that most other spot Bitcoin BTC ETFs have been seeing.