Alameda Research has launched a legal case against Grayscale Investments, alleging excessive management fees and preventing redemptions. Grayscale, a prominent player in the crypto market, operates popular over-the-counter traded funds including Bitcoin Trust and Ether Trust. The lawsuit names Grayscale CEO Michael Sonnenshein as a defendant and accuses Grayscale of charging a 2% annual management fee, above the industry standard of 0.54%. Accredited investors can deposit Bitcoin or Ethereum to receive shares of the trust. Alameda holds $290m of shares in GBTC and ETHE, with the stake set to rise to $540m if redemptions are permitted. GBTC has caused problems for investors with regulations preventing them from selling shares within six months of investing, and with Grayscale trusts trading at a significant discount to BTC and ETH. The firm has abstained from redemptions during the discounted period due to concerns about an impact on Bitcoin prices and Grayscale’s operational future. Grayscale has labelled the Alameda lawsuit as misguided, and its case against the SEC regarding ETF conversion of GBTC continues.
