Alameda Research Ltd., the hedge fund associated with bankrupt FTX, has voluntarily dismissed a lawsuit it had brought against Grayscale Investments. The fund also accordingly dropped its lawsuit against Grayscale CEO Michael Sonnenshein, Digital Currency Group and its CEO Barry Silbert.
The firm had been seeking injunctive relief to "allow redemptions and reduce fees in Grayscale trusts" and unlock $9 billion or more in value for shareholders. John J. Ray lll, CEO of FTX, previously said the goal was to unlock value being "suppressed by Grayscale's self-dealing and improper regulation ban."
"We are pleased to confirm that Alameda Research, FTX's affiliated hedge fund, has voluntarily dismissed its lawsuit against Grayscale," a Grayscale spokeswoman said in a statement on Monday. "Alameda's voluntary dismissal underscores Grayscale’s position that this legal action was entirely without merit."
Alameda's move to drop the lawsuit comes after Grayscale completed the conversion of its flagship GBTC fund into a spot ETF. It's since seen redemptions into the billions of dollars.
The bitcoin ETFs were approved by the Securities and Exchange Commission earlier this month after judges in a D.C. court over the summer ruled that the SEC had to re-review a bid from Grayscale to convert its GBTC to a spot bitcoin ETF. Three judges in a D.C. court found that the SEC was being "arbitrary and capricious" because it didn't explain its differential treatment between approving past bitcoin futures ETFs and spot bitcoin ETFs.
Updated at 11 a.m. ET to note the lawsuit also was dismissed against other parties
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