FTX bankruptcy managers are suing Grayscale and Digital Currency Group (DCG) to recover hundreds of millions of dollars in Bitcoin and Ethereum.
Indeed, in a press release, FTX announced that its sister company Alameda Research has decided to sue Grayscale, as well as its parent company Digital Currency Group (DCG), and the CEOs of both entities Michael Sonnenshein and Barry Silbert.
FTX accuses Grayscale of abusive practices
In their view, the pricing policy and the inability to buy back shares have led to a drastic reduction in the value of the shares held by Alameda Research, an affiliate of the exchange.
In other words, FTX accuses Grayscale of abusive practices that devalued Alameda’s shares in its BTC and ETH trusts.
As a reminder, Grayscale is the fund that holds tens of billions of dollars in Bitcoin, including 635,000 BTC stored at Coinbase Custody, under management for its clients, of which Alameda is one. For its part, Digital Currency Group (DCG) is the parent company of Grayscale, the company recorded a loss of $ 1.1 billion in 2022.
Thus, the new management team of FTX, in charge of turning around the company’s finances, wants to be able to recover Alameda Research’s Bitcoin (BTC) and Ethereum (ETH) assets currently held under management at Grayscale in order to sell them to raise several hundred million dollars that could be used to pay back some creditors.
In its press release, FTX denounces, among other things, the fact that Grayscale’s clients do not have the possibility to recover their assets. The complaint also denounces “$1.3 billion in exorbitant management fees” charged to Grayscale clients.
The statement explained:
If Grayscale reduced its fees and stopped unduly preventing redemptions, the FTX debtors’ shares would be worth at least $550 million, or about 90 percent more than the current value of FTX debtors’ shares today.
John J. Ray III, Managing Director and Head of FTX Debtors’ Restructuring, stated:
We will continue to use every tool we can to maximize recoveries for FTX’s customers and creditors.
Our goal is to unlock the value that we believe is currently being squeezed by Grayscale’s prohibition on self-dealing and inappropriate repurchases. FTX customers and creditors will benefit from additional recoveries, as well as other Grayscale Trust investors who are harmed by Grayscale’s actions.
