Bankrupt crypto exchange FTX’s former trading arm Alameda Research is reportedly no longer pursuing its lawsuit against crypto giant Grayscale.
Last March, debtors of the bankrupt digital asset exchange FTX filed a lawsuit against Grayscale in Delaware.
The lawsuit alleged that Grayscale extracted over $1.3 billion in excessive management fees in violation of trust agreements. Additionally, Alameda claimed that Grayscale’s actions reduced the value of shares in its Bitcoin (BTC) and Ethereum (ETH) Trusts to 50% of the respective asset values.
At the time, FTX was seeking injunctive relief to unlock over $9 billion in value for shareholders and recover over a quarter billion dollars for FTX Debtors’ customers and creditors. FTX CEO John J. Ray III said the aim was to maximize asset recovery for the exchange’s stakeholders.
“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.”
Now, according to Reuters, Alameda is dropping the lawsuit.
Says a Grayscale spokesperson,
“Alameda’s voluntary dismissal underscores Grayscale’s position that this legal action was entirely without merit.”
FTX went bankrupt in November 2022.
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