Bankrupt FTX’s sister arm Alameda Research files a lawsuit against Grayscale Investments, Grayscale CEO Michael Sonnenshein, Grayscale owner Digital Currency Group (DCG), and the DCG CEO Barry Silbert.
According to the announcement, “the FTX Debtors are seeking injunctive relief to unlock $9 billion or more in value for shareholders of the Grayscale Bitcoin and Ethereum Trusts (the “Trusts”) and realize over a quarter billion dollars in asset value for the FTX Debtors’ customers and creditors.”
Alameda Research claims that Grayscale has violated the Trust agreements by collecting approximately $1.3 billion in excessive management fees in just the last two years alone.
The bankrupt firm added that for years, Grayscale cloaked behind fabricated justifications to thwart shareholders’ attempts to redeem their shares.
Alameda noted that the Trusts’ shares are currently selling at about a 50% discount to Net Asset Value as a result of Grayscale’s activities.
Alameda stated that the FTX Debtors’ shares would be worth at least $550 million if Grayscale cut its costs, and stopped improperly impeding redemptions.
John J. Ray III, CEO, and Chief Restructuring Officer of the FTX Debtors noted: “We will continue to use every tool we can to maximize recoveries for FTX customers and creditors. Our goal is to unlock value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption ban.”
“FTX customers and creditors will benefit from additional recoveries, along with other Grayscale Trust investors that are being harmed by Grayscale’s actions,” Ray added.
Last month, FTX wanted to recover all of its political donations by February 28, 2023. The FTX debtors were examining $93 million in political donations made between March 2020 and November 2022.
Meanwhile, DCG’s lending arm Genesis Global filed for bankruptcy in January. Gemini’s Cameron Winklevoss later threatened to sue DCG CEO Barry Silbert for defrauding over 340,000 Earn users.
