Alameda Research Files Lawsuit Against Grayscale Over ‘Self-Imposed Redemption Ban’

Alameda Research has filed a lawsuit against Grayscale Investments in the Delaware Court of Chancery, it announced on March 6. It has also filed claims against Grayscale CEO Michael Sonnenshein, Grayscale owner Digital Currency Group (DCG) and group CEO Barry Silbert.

Alameda Research is an affiliate of FTX, which filed for bankruptcy in November. The lawsuit aims 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 customers and creditors of the FTX Debtors,” a statement said.

Related: The Digital Currency Group’s Genesis Implosion: What Comes Next?

The plaintiff alleged that Grayscale charged more than $1.3 billion in management fees in violation of trust agreements. In addition, “fabricated excuses” to prevent shareholders from buying back their shares in what the statement described as a “self-imposed redemption ban.” As a result, the statement continued, the Trusts’ shares are trading “at approximately 50% off net asset value.” Therefore, the plaintiff claimed:

“If Grayscale reduced its fees and stopped improperly preventing redemptions, the shares of the FTX Debtors would be worth at least $550 million, about 90% more than the current value of the shares of the FTX Debtors today .”

According to The Financial Times, Alameda owns 22 million shares of Grayscale’s Bitcoin (BTC) Trust and 6 million shares of its Ethereum (ETH) Trust.

The Court of Chancery describes itself as “a forum for the settlement of disputes concerning the internal affairs of […] Delaware Companies.” Fir Tree Capital Management filed a lawsuit in December in the same court seeking similar remedies.

Genesis Global, the lending arm of DCG, filed for bankruptcy on January 19. Grayscale has sued the U.S. Securities and Exchange Commission over the latter’s decision to reject Grayscale’s application to create a Bitcoin spot exchange. Oral arguments in that case will be heard on March 7 in the District of Columbia Court of Appeals.

DCG did not immediately respond to a question from Cointelegraph.