Bankruptcy cryptocurrency exchange FTX has dropped a lawsuit against digital asset manager Grayscale via its trading platform, Alameda Research.
This is coming after FTX and Alameda Research filed for bankruptcy two years ago while trying to get their assets back in an attempt to refund creditors. Grayscale was accused of "enriching itself at the expense of shareholders."
As reported by Reuters, the FTX trading arm concluded that it'd drop the lawsuit, which was filed in March 2023, on Monday.
The lawsuit against Grayscale was submitted in a court in Delaware, also persecuting Digital Currency Group, Inc. (DCG) and the CEOs of both companies mentioned above.
Grayscale chief executive officer Michael Sonnenshein was mentioned in the lawsuit, along with parent company Digital Currency Group, Inc. (DCG) CEO Barry Silbert.
Alameda Research accused the digital asset manager Grayscale of "misusing its control over digital assets worth more than $19 billion for the enrichment of their pockets."
This was done at the expense of shareholders, who trust the digital asset manager with their funds.
FTX also accused Grayscale of charging high fees and stopping investors from redeeming their shares from the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust.
However, a spokesperson from Grayscale has reacted to the recent development. According to the spokesperson, "Alameda's voluntary dismissal underscores digital asset manager's position that this legal action was entirely without merit."
Following the approval of GBTC as a spot Bitcoin ETF by the US Securities and Exchange Commission this month, Grayscale has witnessed billions of outflows since trading began.
Although there have been about 10 ETF inflows, the outflow volume of previous recorded trading days has hit $2.8 billion since January 11.
These historical records can be attributed to the redemption of GBTC shares owned by investors as they look to invest in other ETFs with lower fees.
The recent sale of GBTC shares by FTX constitutes around one-third of the recent outflows experienced by GBTC, exerting an impact on the price of BTC in the past few weeks.
As of now, the Bitcoin price stands at $40,701.19, reflecting a 2.6% decrease in the last 24 hours. In a similar event, FTX has sold over 20 million shares since the introduction of the ETF. The share accounts for up to $2 billion, taking FTX's GBTC ownership down to zero.
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