Bankrupt cryptocurrency trading firm Alameda Research is suing asset manager Grayscale in a bid to unlock more than $250m of assets for debtors of sister company FTX.
Filed in the Court of Chancery in Delaware, the suit accuses Grayscale of mismanagement of its Bitcoin and Ethereum trusts, allowing shares to trade at around 50% discount to their net asset value.
Alameda alleges that Grayscale and its owner Digital Currency Group has 鈥渋n the past two years alone鈥� extracted over $1.3 billion in exorbitant management fees in violation of the Trust agreements鈥�.
It added: 鈥淕rayscale has for years hidden behind contrived excuses to prevent shareholders from redeeming their shares.鈥�
Alameda said that should Grayscale reduce its fees and allow redemptions, shares held by debtors of collapsed cryptocurrency exchange FTX would be worth at least $550m – 90% more than their current value.
“We will continue to use every tool we can to maximise recoveries for FTX customers and creditors,鈥� said John J. Ray III (pictured), CEO and chief restructuring officer of the FTX debtors.聽
鈥淥ur goal is to unlock value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption ban.鈥�
Describing the suit as 鈥渕isguided鈥� to several publications, Grayscale stated: 鈥淕rayscale has been transparent in our efforts to obtain regulatory approval to convert GBTC (Grayscale Bitcoin Trust) into an ETF (exchange-traded fund) – an outcome that is undoubtedly the best long-term product structure for Grayscale鈥檚 investors.鈥澛�
Meanwhile the White House is monitoring the situation at Silvergate, the latest cryptocurrency company which seems to be at risk of folding.
Press secretary Karine Jean-Pierre said the Biden Administration was aware that the crypto bank was 鈥渆xperiencing significant issues鈥�.
She added: 鈥淚n recent weeks, banking regulators have released guidelines on how banks should protect themselves from risks associated with crypto.聽
鈥淭his is a President that has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets and he will continue to do so.聽
鈥淲e won鈥檛 speak to this particular company as we have not with other cryptocurrency companies, but we will continue to monitor the reports.鈥�
Cryptocurrency shorts
Yuga Labs鈥� first Bitcoin Ordinal NFT collection TwelveFold – 鈥榓 base 12 art system localised around a 12脳12 grid, a visual allegory for the cartography of data on the Bitcoin blockchain鈥� – made the company $16.5 million in just 24 hours. The highest winning bid paid just over 7 BTC, worth around $161,000. Yuga, which has been criticised for holding unsuccessful bidders鈥� money – Ordinals creator Casey Rodarmor told the company to 鈥済et f****d鈥� and said he would boycott the firm – said bid amounts would be returned within 24 hours.
Coinbase CEO Brian Armstrong says its new layer-2 blockchain network Base may be subjected to transaction monitoring and anti-money laundering measures at launch. He told Bloomberg that it contains centralised components but 鈥渨ill be more and more decentralised over time鈥�.
Digital collectibles platform Few and Far has raised $10.5 million funding led by Pantera Capital.
Square Enix president Yosuke Matsuda is set to resign, with chief strategy officer Takashi Kiryu taking over at the helm of the Japanese videogame giant, maker of Final Fantasy. Matsuda was the key driver behind the company鈥檚 pivot towards blockchain gaming and NFTs.
Crypto prices
The overall market cap of the 22,700 coins is at $1.03 trillion at the time of writing (7am UK), a 0.4% increase in the last 24 hours.
For round-ups of recent cryptocurrency news developments,聽click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.