Grayscale's SEC Triumph Could Potentially Nullify Alameda's Redemptions Lawsuit, Bloomberg Analysts Suggest

Grayscale's recent favorable ruling against the U.S. Securities and Exchange Commission has far-reaching implications, potentially impacting a lawsuit initiated by FTX affiliate Alameda Research. The lawsuit, brought forward by Alameda, sought to prompt changes in the Grayscale Bitcoin Trust (GBTC), urging fee reductions and the introduction of a redemption program.

The reverberations of Grayscale's triumph over the SEC extend to the possible transformation of GBTC into the United States' first spot bitcoin ETF. Such a shift would not only allow the redemption of fund shares but could also render Alameda's lawsuit unnecessary, according to litigation experts from Bloomberg Intelligence. Enabling redemptions might enable the fund to maintain a closer alignment with the value of its underlying bitcoin assets, addressing a challenge it has grappled with for an extended period.

"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 explained.

Alameda Research, an affiliate of FTX, filed a lawsuit in March that took aim at Grayscale and its parent company Digital Currency Group. The lawsuit raised concerns about Grayscale's high fees and its refusal to facilitate investors' redemption of shares within its crypto-focused trusts, particularly the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust.