Alameda Research has withdrawn its lawsuit against Grayscale Investments, which was filed in March 2023. The lawsuit, seeking injunctive relief, claimed that Grayscale's practices depressed the value of FTX debtors' assets. Alameda Research's legal action specifically targeted the collection of management fees, which had exceeded $1.3 billion by the time of the lawsuit filing. The suit also alleged that Grayscale imposed a "self-imposed redemption ban," preventing shareholders from redeeming shares of Grayscale Bitcoin (GBTC) and Ethereum Trust.
In the lawsuit, Alameda Research sought a court order to challenge the collection of management fees, asserting that if Grayscale reduced its fees and stopped blocking redemptions, the value of FTX Debtors' shares would increase by at least 90%. Grayscale CEO Michael Sonnenshein, parent company Digital Currency Group (DCG), and DCG's CEO Barry Silbert were all named in the lawsuit. Barry Silbert resigned from Grayscale's board of directors in December.
Grayscale, responding to the withdrawal of the lawsuit, stated that Alameda Research's legal action was without merit. Grayscale's spokesperson emphasized the company's satisfaction with the voluntary dismissal of the lawsuit by Alameda Research. Grayscale's flagship product, GBTC, recently converted to a spot exchange-traded fund (ETF) after receiving approval from the U.S. Securities and Exchange Commission. Despite the conversion, GBTC's 1.5% management fee remains relatively high compared to competitors. GBTC has experienced significant outflows since becoming a spot ETF, resulting in a decrease in assets under management to $23.7 billion as of January 18. This trend contrasts with the upward trajectory of most other spot Bitcoin ETFs.
