Grayscale Accused of High Fees and Restricting Investor Redemptions

Summary

  • Alameda, lodged lawsuit against Grayscale in March last year at a Delaware court.
  • They blamed Grayscale which manages Grayscale Trust (GBTC) and another Grayscale Trust, for high fees and dismissing investor redemption requests.
  • The lawsuit involves key figures such as Grayscale CEO Michael Sonnenshein, Digital Currency Group (DCG) and its CEO Barry Silbert.
  • GBTC began to operate as an exchange-traded fund on NYSE Arca once approved by the U.S. Securities and Exchange Commission.
  • After bankruptcy in November 2022, FTX is striving to recover assets for creditor repayment.

Alameda and Lawsuit

Having filed a lawsuit in the Delaware court in March of the previous year, Alameda had in addition argued that Grayscale imposed excessive fees and declined share redemptions from investors involving its two cryptocurrency-oriented trusts, identified as the Grayscale Trust (GBTC) and another Grayscale Trust.

Naming High Profile Figures

The lawsuit saw Grayscale CEO, Michael Sonnenshein, named along with affiliated company Digital Currency Group (DCG) including its CEO, Barry Silbert.

GBTC Trading and Conversion

GBTC made its debut as an exchange-traded fund earlier that month on NYSE Arca, following the U.S. Securities and Exchange Commission’s go-ahead to turn the pre-existing Grayscale Bitcoin Trust into an ETF.

FTX After Bankruptcy

FTX, having declared bankruptcy in November 2022, has been progressively aiming to retrieve assets to settle its creditors.

As a consequence, these events could potentially affect Forex or trading scenarios, with assets like GBTC and other Grayscale trust shares potentially witnessing fluctuations.

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