Alameda Research Abandons Lawsuit Against Grayscale: FTX Affiliate Update

• Alameda Research Withdraws Lawsuit Against Grayscale Investments
• Background of the Lawsuit
• FTX's Debts and Customer Claims
• Dismissal of the Lawsuit
• Conversion of GBTC into an ETF
• Recent Developments in FTX
• Current Status of Bitcoin

Alameda Research Withdraws Lawsuit Against Grayscale Investments

Alameda Research, a companion company to FTX$3.28 -5.38%, has withdrawn its lawsuit against Grayscale Investments. This comes after Grayscale's flagship trust product was converted into an exchange-traded fund (ETF). This recent development was revealed in a court document.

Background of the Lawsuit

The lawsuit, which was filed in March of the previous year, claimed that more than $9 billion in investor funds became stuck in Grayscale's Bitcoin$42,260 -0.64% Trust (GBTC). This happened after the collapse of FTX. The litigation was part of broader initiatives to maximize recoveries for FTX clients whose funds were lost or locked on the failed crypto exchange and its affiliate platforms. Additionally, the suit accused Grayscale of having extraordinarily high fees.

FTX's Debts and Customer Claims

FTX is facing 36,075 customer claims, amounting to a total of $16 billion, as reported by the Wall Street Journal. It also owes nearly $3.1 billion to its top 50 corporate creditors, as indicated by a 2022 bankruptcy filing.

Dismissal of the Lawsuit

The voluntary dismissal by Alameda highlight's Grayscale's position that this legal action was completely without merit, came a statement from a spokesperson for Grayscale.

Conversion of GBTC into an ETF

The GBTC, the largest bitcoin investment pool globally, was converted into an exchange-traded fund earlier this month. This was following the Securities Exchange Commission (SEC) granting approval for the first investment vehicle of its kind. Previously, when the product was a trust, GBTC holders found it challenging to exit their positions. However, with its conversion to an ETF, about $2.8 billion has already been drained from GBTC as of last week.

Recent Developments in FTX

The dismissal came soon after FTX sold off more than $1 billion in GBTC shares. This was first reported through internal documents of the firm and sources acquainted with the situation.

Current Status of Bitcoin

As of writing on Monday, Bitcoin was trading at $40,419, marking a decline of approximately 3% from the previous day, according to the Bitcoin price index.

Edited by Jonathan Stoker