Alameda Research, the speculative fund associated with FTX, has voluntarily dropped its lawsuit against Grayscale Investments. The firm initially sought legal relief to allow redemptions and reduce fees within Grayscale’s trusts, a move aimed at unlocking over $9 billion in value for shareholders.
Alameda Drops Lawsuit Against Grayscale
Alameda Research, currently in bankruptcy proceedings with FTX, has chosen to withdraw from a legal dispute against Grayscale Investments. The company initially sought judicial relief to enable redemptions and reduce fees within Grayscale’s trusts, a move aimed at unlocking value estimated to be over $9 billion for shareholders.
John J. Ray III, the new CEO of FTX, had previously expressed that the goal was to unlock value “suppressed by Grayscale’s self-trading and inappropriate regulatory ban.”
Grayscale’s Response and Successful ETF Conversion
Following the withdrawal of the lawsuit, a spokesperson for Grayscale stated:
We are pleased to confirm that Alameda Research, the hedge fund affiliated with FTX, has voluntarily dropped its lawsuit against Grayscale. Alameda’s voluntary withdrawal underscores Grayscale’s position that this legal action was completely without merit.
Alameda’s decision to withdraw the lawsuit comes amid Grayscale’s completion of the conversion of its GBTC into a Bitcoin Spot ETF. Since this conversion, the fund has experienced significant redemptions, totaling billions of dollars. The U.S. Securities and Exchange Commission had approved this conversion earlier this month, following a court decision in D.C. ruling that the SEC must reexamine Grayscale’s request to convert its GBTC into a Bitcoin Spot ETF.
The judges had deemed that the SEC was acting in an “arbitrary and capricious” manner by not explaining its differential treatment between past approval of Bitcoin futures ETFs and Bitcoin Spot ETFs.
