FTX affiliate Alameda Research sues Grayscale over fees, redemption prevention

Alameda Research, the hedge fund arm of Sam Bankman-Fried's bankrupt FTX crypto empire, has filed a lawsuit against Grayscale Investments, alleging that the firm has been charging unfairly high fees and preventing Alameda from redeeming shares in the Grayscale Bitcoin Trust ( OTC:GBTC ) and Grayscale Ethereum Trust ( OTCQX:ETHE ). FTX estimated that its debtors' shares would be worth at least $550M, or 90% more than their current value, if Grayscale reduced its fees and stopped improperly preventing redemptions. "Our goal is to unlock value that we believe is currently being suppressed by Grayscale's self-dealing and improper redemptions ban," John J. Ray III, CEO and chief restructuring officer of the FTX Debtors, said. "FTX customers and creditors will benefit from additional recoveries, along with other Grayscale Trust investors that are being harmed by Grayscale's actions." Grayscale did not immediately respond to Seeking Alpha's request for comment. A spokesperson for Grayscale told Reuters that the lawsuit is "misguided," adding that "Grayscale has been transparent in our efforts to obtain regulatory approval to convert GBTC into an ETF – an outcome that is undoubtedly the best long-term product structure for Grayscale's investors." In June, Grayscale sued the Securities and Exchange Commission after the regulator rejected Grayscale's application to convert GBTC into an exchange-traded fund. In January, FTX's caretakers said they've located more than $5B in cash, sellable crypto, and liquid investment securities.