Alameda Research Ltd. Drops Lawsuit Against Grayscale Investments
Alameda Research Ltd., the hedge fund associated with bankrupt FTX, has chosen to dismiss its lawsuit against Grayscale Investments. The hedge fund had sought injunctive relief to unlock value in Grayscale trusts and allow redemptions for shareholders. The CEO of FTX, John J. Ray III, accused Grayscale of suppressing value through self-dealing and improper regulation.
A spokeswoman for Grayscale confirmed that Alameda Research voluntarily dropped the lawsuit, emphasizing that it was without merit.
ETF Conversion
Alameda Research’s decision to withdraw the lawsuit comes after Grayscale successfully converted its GBTC fund into a spot ETF. Since then, the fund has experienced billions of dollars in redemptions.
The approval of bitcoin ETFs by the Securities and Exchange Commission (SEC) followed a ruling by judges in a D.C. court that required the SEC to re-review Grayscale’s bid for a spot bitcoin ETF conversion. The court found that the SEC’s differential treatment between futures ETFs and spot bitcoin ETFs was “arbitrary and capricious.”
Hot Take: Alameda Research Drops Lawsuit Against Grayscale Investments
Alameda Research’s decision to voluntarily dismiss its lawsuit against Grayscale Investments marks an interesting development in the ongoing disputes within the crypto industry. The hedge fund’s aim to unlock value in Grayscale trusts and allow redemptions for shareholders highlights the tensions surrounding regulation and self-dealing practices. Grayscale’s successful conversion of its GBTC fund into a spot ETF adds another layer to this story, as the SEC’s differential treatment between futures ETFs and spot bitcoin ETFs was deemed “arbitrary and capricious” by a D.C. court. The resolution of this lawsuit may have broader implications for the industry as a whole.
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