Grayscale’s SEC Victory May Render Alameda’s Redemptions Lawsuit Unnecessary, Bloomberg Analysts Say

The ruling could lead to Grayscale's GBTC converting into a bitcoin ETF, which would allow redemptions, making Alameda's suit unnecessary, Bloomberg Intelligence analysts said in a note on Wednesday.

AccessTimeIconAug 30, 2023 at 8:49 p.m. UTC
Updated Aug 31, 2023 at 3:40 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A knock-on effect of Grayscale’s recent favorable ruling against the U.S. Securities and Exchange Commission is that it potentially renders meaningless a lawsuit brought by FTX affiliate Alameda Research, which called for the Grayscale Bitcoin Trust to reduce its fees and implement a redemption program.

Grayscale's victory over the SEC could pave the way for the company to convert it into the first U.S. spot bitcoin ETF – a shift that would permit redemptions of fund shares, making Alameda's suit unnecessary, litigation analysts from Bloomberg Intelligence said in a note on Wednesday. (Redemptions could allow the fund to remain more closely tied to the value of its underlying bitcoin holdings, something it's struggled to do for quite a while.)

“The Grayscale court ruling probably shows that Alameda's attempt to unlock about $9 billion for Grayscale shareholders was premature and ultimate resolution of the issue may be prolonged,” the analysts wrote.

A lawsuit filed by FTX affiliate Alameda Research in March attacked Grayscale and its owner Digital Currency Group (which also owns CoinDesk), for its high fees and its refusal to allow investors to redeem their shares from its two crypto-focused trusts, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust.

Edited by Nick Baker.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Ian Allison

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.