FTX Trading Ltd’s debtor affiliate Alameda Research Ltd has filed a lawsuit against crypto asset manager Grayscale Investments LLC, its CEO Michael Sonnenshein, and its owners Digital Currency Group and Barry Silbert in the Court of Chancery in the State of Delaware.
FTX debtors are attempting to recover funds from the crypto exchange and its subsidiaries after FTX filed for bankruptcy in November.
In a statement, the FTX debtors said they are seeking injunctive relief to unlock $9 billion or more in value for shareholders of the Grayscale Bitcoin and Ethereum Trusts and realize more than a quarter of a billion dollars in asset value for the FTX debtors’ customers and creditors.
READ: Bitcoin and Ethereum: Crypto fails to regain hefty losses
In the complaint, it is alleged that over the past two years alone Greyscale has extracted over $1.3 billion in exorbitant management fees in violation of the Trust agreements; Grayscale has for years hidden behind contrived excuses to prevent shareholders from redeeming their shares; and Grayscale's actions have resulted in the Trusts' shares trading at approximately a 50% discount to their net asset value.
It is also alleged that if Grayscale reduced its fees and stopped improperly preventing redemptions, the FTX debtors' shares would be worth at least $550 million, approximately 90% more than the current value of the FTX debtors' shares today.
FTX Trading CEO and chief restructuring officer John J Ray III said they would continue to use every tool they could to maximize recoveries for FTX customers and creditors.
“Our goal is to unlock value that we believe is currently being suppressed by Grayscale's self-dealing and improper redemption ban,” he said.
“FTX customers and creditors will benefit from additional recoveries, along with other Grayscale Trust investors that are being harmed by Grayscale's actions."
Contact the author at emily.jarvie@proactiveinvestors.com
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