Alameda’s Withdraw Strengthens Grayscale’s Legal Position
Alameda Research, an affiliate of the bankrupt cryptocurrency exchange FTX, has withdrawn its legal action against Grayscale Investments filed in a Delaware court in March of the previous year. According to a court document revealed on Monday, the lawsuit accused Grayscale of profiting at the expense of shareholders and imposing excessive fees.
Alameda’s withdrawal of the lawsuit strengthens Grayscale’s legal position. The voluntary dismissal underscores Grayscale’s position that the legal action was entirely without merit. This declaration came from a representative for Grayscale, who emphasized that the company always viewed it as baseless. The lawsuit had also named Grayscale CEO Michael Sonnenshein, Digital Currency Group (DCG), and its CEO Barry Silbert as defendants.
The lawsuit also accused Grayscale of denying investors the opportunity to redeem their shares from its two cryptocurrency-based trusts, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust. At the start of the month, the Grayscale Bitcoin Trust began trading as an exchange-traded fund (ETF) on the NYSE Arca, after approval from the U.S. Securities and Exchange Commission.
FTX Aims To Recover In Billions
The trial of Sam Bankman-Fried has concluded, but the bankruptcy proceedings of FTX, the cryptocurrency exchange, are actively unfolding. Under the guidance of John Ray III, FTX is vigorously working to reclaim billions of dollars for its creditors. Last week, a federal appeals court mandated the appointment of an independent bankruptcy examiner to probe into the November 2022 downfall of FTX.
Overturning a prior decision, the 3rd U.S. Circuit Court of Appeals in Philadelphia concurred with a government oversight body that the appointment of an examiner is compulsory under the U.S. Bankruptcy Code, given the substantial scale of FTX’s case. This includes the purported misappropriation of customer assets amounting to $10 billion. Interestingly, Joseph Bankman and Barbara Fried, parents of Sam Bankman-Fried, have moved to dismiss a lawsuit from FTX, seeking to reclaim allegedly fraudulently transferred funds.
Hot Take
Alameda Research, an affiliate of the bankrupt cryptocurrency exchange FTX, has withdrawn its lawsuit against Grayscale Investments, strengthening Grayscale’s legal position. In the partnership between FTX and Grayscale, the lawsuit was seen as entirely without merit and baseless. The lawsuit also accused Grayscale of imposing excessive fees and denying shareholders redemption opportunities, but with its position strengthened, Grayscale continues to move forward. At the same time, FTX is working vigorously to reclaim funds and resolve its bankruptcy-related issues.
By
By
By
By