- It is part of the steps aimed at getting back money lost after the collapse of the crypto exchange.
- If FTX wins the case, investors could get over $250 million.
The trading arm of the failed crypto exchange FTX, Alameda Research, is suing asset management company Grayscale Investments in renewed efforts to unlock more than $9 billion for the shareholders of the Grayscale Bitcoin and Ethereum Trusts and $250 million for FTX creditors.
In a complaint filed Monday before the Court of Chancery in the State of Delaware, the FTX debtors, which Alameda is a part of, blame Grayscale for suppressing the value of the trusts’ shares by – blocking redemptions and charging high fees.
‘‘In the past two years alone, Grayscale has extracted over $1.3 billion in exorbitant management fees in violation of the Trusts’ agreements,’’ FTX said. As a result, ‘The Trusts’ shares are trading approximately at a 50% discount to their Net Asset Value. If that were not the case, the plaintiffs argue, the shares would be at least $550 million, or 90% more than the current value of the FTX Debtors’ shares.
Efforts To Recover FTX’s Lost Billions
The development is part of new efforts by the FTX CEO overseeing the bankruptcy, John J. Ray III, to recover investors’ money believed to have been squandered by former CEO Sam Bankman-Fried and his top managers through alleged commingling of funds, investing in risky ventures, and funding political parties. The executives now face incriminating charges in the US after their extradition from the Bahamas, where the company was based.
See Related: FTX Orders Beneficiaries of Its Political Donations to Return Money – Estimated at $93 million
Commenting on the matter, Ray said: ‘‘we will continue to use every tool we can 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. FTX customers and creditors will benefit from additional recoveries, along with other Grayscale Trust Investors that are being harmed by Grayscale’s actions.’’
