FTX-linked firm sues crypto company for ‘enriching itself at shareholders’ expense’

Alameda, an affiliate of the bankrupt FTX, has sued Grayscale this week.

Grayscale Investments and its owner, cryptocurrency conglomerate Digital Currency Group (DCG), were both sued, according to FTX, on Monday. 

The lawsuit claimed Grayscale Investments was “enriching itself at shareholders’ expense.”

Alameda criticised Grayscale for its exorbitant fees and unwillingness to permit investors to redeem their shares from its two crypto-focused trusts, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust, in a lawsuit submitted to a Delaware court on Monday.

After the bankruptcy of its subsidiary Genesis Global Trading last year, which was sparked by a cryptocurrency crash made worse by the high-profile failure of FTX, DCG is already under pressure.

After the U.S. Securities and Exchange Commission denied the company’s request to turn GBTC into an exchange traded fund last year, Grayscale filed a lawsuit against the agency (ETF).

Alameda said that Grayscale was yet charging advisers on cryptocurrency-related ETFs fees that were far higher than usual.

“The lawsuit filed by Sam Bankman-Fried’s hedge fund, Alameda Research, is misguided. 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,” a representative for Grayscale stated.

The damage caused by Grayscale’s acts, according to Alameda, is in the hundreds of millions of dollars.

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