According to a press release, FTX’s sister company Alameda Research has sued cryptocurrency asset management Grayscale Investments, requesting injunctive relief to recover what it alleges is approximately $250 million in asset value for the FTX Debtor’s clients and creditors.
The Delaware Court of Chancery received the complaint. Moreover, it makes accusations against Barry Silbert, the CEO of Grayscale’s owner Digital Currency Group (DCG), and Michael Sonnenshein, the CEO of Grayscale. Coindesk is also owned by DCG.
Grayscale is allegedly managing the Grayscale Bitcoin and Ethereum trusts at excessive management costs, and the company has let the shares of these trusts to trade at about a 50% discount to their net asset value.
According to the lawsuit, FTX Debtor’s shares would be worth at least $550 million, or about 90% more than their present value, if Grayscale decreased its fees and permitted redemptions.
“We will continue to use every tool we can to maximize recoveries for FTX customers and creditors,” said John J. Ray III, CEO, and chief restructuring officer of the FTX Debtors, in a statement. “Our goal is to unlock value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption ban.”
A Grayscale representative referred to the lawsuit as “misguided” in an email to CoinDesk, adding that “Grayscale has been transparent in our efforts to obtain regulatory approval to convert GBTC into a [exchange-traded fund] – an outcome that is unquestionably the best long-term product structure for Grayscale’s investors.”
At a hearing on Tuesday before the Washington, D.C. Circuit Court of Appeals, Grayscale plans to challenge the SEC’s decision to deny its request to turn GBTC into an ETF.