Alameda Research, the collapsed cryptocurrency trading arm of bankrupt exchange FTX, has decided to drop its lawsuit against Grayscale Investments. Reuters reported this development on Monday, as detailed in their article.

Initially filed in March 2023, the lawsuit accused Grayscale of benefiting at the expense of its shareholders. This legal move predates Grayscale’s recent success with the US Securities and Exchange Commission (SEC), leading to the approval of spot Bitcoin ETFs, including Grayscale’s Bitcoin Trust (GBTC).

Following the approval and conversion of GBTC into a spot ETF, investors are now able to redeem their shares. This resolution addresses the issue raised in the lawsuit, as Grayscale has observed substantial outflows since GBTC began trading on January 11, 2024. On that day, the company reportedly sent 15,308 BTC worth over $623 million to Coinbase Prime.

Amidst the BTC outflow, the price of Bitcoin has experienced a decline, reaching lows of $40,367 on Monday, January 22, 2024.

FAQs

What was the lawsuit filed by Alameda Research against Grayscale about?

Alameda Research’s lawsuit alleged that Grayscale had enriched itself at the expense of its shareholders.

What led to the dismissal of the lawsuit against Grayscale?

The dismissal came following Grayscale’s victory over the US Securities and Exchange Commission (SEC), which led to the approval of several spot Bitcoin ETFs, including Grayscale’s Bitcoin Trust (GBTC).

How did Grayscale address the redemption issue raised in the lawsuit?

With the approval and conversion of GBTC into a spot ETF, Grayscale investors have been able to redeem their shares, which has resulted in significant outflows.

Following the resolution of the lawsuit, what impact did Grayscale observe?

Since GBTC began trading on January 11, 2024, Grayscale has witnessed substantial outflows, with the company reportedly sending 15,308 BTC worth over $623 million to Coinbase Prime.

What has been the impact of these developments on the price of Bitcoin?

The price of Bitcoin has faced downward pressure amidst the BTC outflow, reaching lows of $40,367 on Monday, January 22, 2024.