- FTX debtors launch a website to unite shareholders of Grayscale Trusts.
- Grayscale allegedly charged excessive management fees and prevented shareholders from redeeming their shares.
- Alameda urges shareholders to contribute as co-plaintiffs before September 1.
In a recent announcement, Alameda Research, UTXO Management, and Balch & Bingham LLP unveiled GrayscaleLitigation.com. According to the notification, the platform seeks to unite the Grayscale Bitcoin Trust and Grayscale Ethereum Trust shareholders for collective legal action against Grayscale Investments.
Notably, this litigation effort was originally initiated by Alameda, a debtor of FTX Trading. The firm seeks to address alleged wrongdoings committed by the Grayscale Trusts. The Bankrupt FTX exchange shared the development on Monday via its official X account.
Major shareholders of Grayscale® Bitcoin Trust and Grayscale® Ethereum Trust urge other shareholders to visit https://t.co/JJ69x6616L to join lawsuit against Grayscale Investments, LLC and recover value lost to Grayscale’s mismanagement. Read details here: https://t.co/FmwSxHWmKf— FTX (@FTX_Official) August 21, 2023
Reportedly, Grayscale has been siphoning off substantial shareholder value by imposing excessive management charges. FTX debtors argued that these fees contravene the terms of the Trust agreements. Furthermore, Grayscale allegedly employed various excuses to prevent shareholders from redeeming their shares.
In light of the violations, FTX debtors seek to hold Grayscale accountable. They aim to reclaim lost value and ensure justice for what they perceive as consistent negligence on Grayscale’s part in safeguarding shareholders’ interests.
Meanwhile, Grayscale noted the success of Alameda’s endeavor hinges on the participation of current shareholders. According to Grayscale, the participating shareholders must collectively possess a minimum of 10% of all shares within the Trusts.
Therefore, Alameda is urging shareholders to contribute as co-plaintiffs by submitting their information before September 1, 2023, through GrayscaleLitigation.com. Notably, Balch & Bingham LLP has pledged to represent eligible shareholders at no financial cost to them in the legal proceedings.
Moreover, Alameda seeks a legal pronouncement that Grayscale and its controllers have violated obligations outlined in the Trust documents and Delaware law. Alleged breaches include the failure to ensure competitive sponsor’s fees. It also included failure to establish a shareholder redemption program capable of reversing the trading discount at which the Trusts are currently operating.
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