Grayscale Gets Sued By FTX As Bankrupt Exchange Wants Funds Released Worth $9 Billion

Just recently, Grayscale announced that it was going after the securities regulator from the United States, SEC.

However, Grayscale itself has been faced with a surprise in the form of FTX, a bankrupt cryptocurrency exchange. FTX is the sister company of Alameda Research, a crypto trading firm that went bankrupt alongside FTX.

FTX Goes After Grayscale

The latest reports claim that the FTX exchange has decided to take legal action against Grayscale. The reports confirm that a lawsuit has been filed by the defunct exchange against Grayscale.

The company is known for being one of the largest funds for Bitcoin and it also holds a large number of altcoins.

The sources have confirmed that the exchange has gone after the fund on behalf of its affiliates and debtors.

FTX Demands Funds from Grayscale

The lawsuit filed by the exchange demands Grayscale permission to release the Ethereum and Bitcoin Trusts.

According to an estimation, the trusts being held by the platform may have an overall accumulation of more than $9 billion. These funds being held by Grayscale are in the form of Bitcoin and Ethereum.

Bitcoin Stash of Grayscale

The FTX Debtors have also issued a press release on Monday that is related to the same concern. According to the debtors, they have also raised the matter with the court by filing a claim against Grayscale.

The information acquired from the court suggests that the lawsuit has been filed against the executives of the company.

Barry Silbert and Michael Sonnenshein are the executives that are to face the lawsuit as it has been filed against their names.

Barry Silbert is the CEO of Digital Currency Group (DCG) while Michael Sonnenshein is the CEO of Grayscale.

Shareholders are to Redeem Up to $250 Million

The teams at the FTX exchange have revealed that the investors will be able to recover the funds they had lost to Grayscale.

According to the findings shared by FTX, it currently has $250 million worth of funds stuck at Grayscale. These funds belong to the exchange as well as the customers.

Most of the customers that have raised the matter with the exchange are the ones who had all of their funds stuck at Grayscale. These investors were left dry and now, they want their funds back so they can fix many things.

It was back in November 2022 when Grayscale announced that it had filed for bankruptcy. It reportedly halted the withdrawals in the same month, which raised huge concerns among investors.

Since then, the users have not been given their funds back. Now, they have decided to file a lawsuit against the firm ad get things straight for them.

In the lawsuit, FTX has made a huge claim against Grayscale. The firm has claimed that Grayscale has halted the investors from withdrawing their funds and shares from the company.

It has continued giving many excuses to the users and shareholders so they do not withdraw their funds from the platform.

Stalling the investors’ requests was not something that the platform had adopted a few weeks back, it has been the same ever since it got married.

Bitcoin Funds from Grayscale

The purpose of the Grayscale platform is to provide Bitcoin indirect access to investors. However, as the platform became troubled, FTX and other companies tried withdrawing funds from the protocol.

Even now, the situation is the same but FTX has involved the court and law enforcement authorities. With their input, the process of getting the funds released by Grayscale would be expedited.

Grayscale does not offer direct access to cryptocurrencies to anyone. Instead, it offers them the opportunity to trade indirectly using cryptocurrencies.

The data shows that prior to its demise, Grayscale had been offering users access to Bitcoin shares. The value of the shares was set to $20.29 but it has fallen to $11.72 per share.

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