Cryptocurrency exchange FTX, amidst its prior bankruptcy, has withdrawn a lawsuit against Grayscale, managed via its trading arm Alameda Research. This development follows FTX and Alameda Research's bankruptcy filings two years ago, where efforts were made to recover assets for creditor reimbursement. Grayscale faced allegations of self-enrichment at the expense of shareholders.
The decision to drop the lawsuit, initially filed in March 2023, was announced by the FTX trading arm recently. The legal action, directed at Grayscale, Digital Currency Group, Inc. (DCG), and their respective CEOs, was lodged in a Delaware court.
Named in the lawsuit were Grayscale CEO Michael Sonnenshein and DCG CEO Barry Silbert. Alameda Research accused Grayscale of misusing control over digital assets exceeding $19 billion for personal enrichment, to the detriment of shareholders' trust.
FTX further accused Grayscale of imposing high fees and impeding investor share redemption from Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust.
In response, a Grayscale spokesperson labeled Alameda's voluntary dismissal as confirming the lawsuit's lack of merit.
Post-approval of GBTC as a Bitcoin ETF by the US SEC, Grayscale saw significant outflows, totaling $2.8 billion since trading inception. While ETF inflows occurred, historical outflows were driven by GBTC share redemptions as investors sought lower fee alternatives.
FTX's recent sale of GBTC shares contributed significantly to outflows, impacting BTC prices. BTC currently stands at $40,701.19, reflecting a 2.6% decline in the last 24 hours. FTX has sold over 20 million shares, totaling $2 billion, effectively reducing its GBTC ownership to zero.
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