Hedge fund Fir Tree is suing crypto investment firm Grayscale to obtain details about its flagship Grayscale Bitcoin Trust (GBTC) in order to investigate potential mismanagement and conflicts of interest, according to a report from Bloomberg.
Fir Tree wants Grayscale to resume redemptions and cut fees for the trust, which is the largest publicly traded crypto fund in the world, with $10.7 billion in assets. It allows U.S. investors to gain exposure to the price movement of bitcoin without buying the asset itself.
GBTC is selling at close to a record 43% discount to the price of the underlying bitcoin in the trust and is down almost 75% this year in the wake of bitcoin's sharp decline and the collapse of several high-profile crypto firms such as FTX. Fir Tree wants to use the information it's seeking to pressure Grayscale to resume redemptions, which are not immediately available to investors, and to cut fees from the current 2%, according to Bloomberg's sources.
Fir Tree is known for making a large short bet against the stablecoin tether earlier this year.
A Grayscale spokesperson told CoinDesk the company's "mission is to help investors access the ever-evolving crypto ecosystem through familiar, secure, and transparent investment vehicles. We respect the views of our shareholders, and appreciate engaging directly with them on the details of our product structures and operating model."
The spokesperson noted that Grayscale is "100% committed to converting GBTC to an ETF," or exchange-traded fund, a proposal the U.S. Securities and Exchange Commission has so far rejected.
Grayscale and CoinDesk are both owned by Digital Currency Group.
UPDATE (Dec. 6, 20:34 UTC): Added comments from Grayscale and additional background throughout.
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