LayerZero Labs

FTX sues LayerZero Labs for $21 million

Alameda Research, UTXO Management, and Balch & Bingham LLP have jointly introduced, a platform designed to unite shareholders of the Grayscale Bitcoin Trust and Grayscale Ethereum Trust for collective legal action against Grayscale Investments.

This legal effort stems from concerns raised by Alameda Research, which is a debtor of FTX Trading.

Their primary objective is to address alleged misconduct by Grayscale Trusts. FTX Trading, which recently filed for bankruptcy, shared this development via its official account.

The crux of the issue lies in Grayscale’s alleged excessive management fees, which FTX debtors claim violate the trust agreements.

Additionally, Grayscale is accused of employing various tactics to prevent shareholders from redeeming their shares.

In response to these violations, FTX debtors are pushing for accountability from Grayscale. Their aim is to recover lost value and seek justice for what they perceive as consistent negligence on Grayscale’s part in protecting shareholders’ interests.

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Grayscale has emphasized that the success of this initiative relies on the participation of current shareholders. To move forward with the legal action, participating shareholders must collectively own at least 10% of all shares within the trusts.

To encourage shareholder involvement, Alameda is urging interested parties to submit their information on before the September 1, 2023 deadline.

Importantly, Balch & Bingham LLP has committed to representing eligible shareholders at no financial cost to them during the legal proceedings.

The key goals of this legal action include obtaining a legal ruling that Grayscale and its controllers have breached the trust documents and Delaware law.

Alleged violations encompass the failure to ensure competitive sponsor’s fees and the absence of a shareholder redemption program capable of reversing the current trading discounts within the trusts.