FTX-tied Alameda Research drops lawsuit against Grayscale

(Reuters) -Bankrupt cryptocurrency exchange FTX’s affiliate Alameda Research has dropped a lawsuit against Grayscale Investments that had accused the digital asset manager of “enriching itself at shareholders’ expense”, a court filing showed on Monday.

Alameda, which filed the lawsuit in a Delaware court in March last year, had also accused Grayscale of charging high fees and refusing to allow investors to redeem their shares from its two crypto-focused trusts, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust.

Grayscale CEO Michael Sonnenshein was named in the lawsuit along with parent company Digital Currency Group (DCG) and its CEO, Barry Silbert.

“Alameda’s voluntary dismissal underscores Grayscale’s position that this legal action was entirely without merit,” a Grayscale spokesperson said.

GBTC began trading as an exchange-traded fund earlier in the month on NYSE Arca after the U.S. Securities and Exchange Commission approved to convert its existing Grayscale Bitcoin Trust into an ETF.

Since it went bankrupt in Nov. 2022, FTX has been trying to recover assets to repay its creditors.

(Reporting by Pritam Biswas in Bengaluru; Editing by Anil D’Silva)