Fir Tree hinted at potential additional litigation against Grayscale and parent company Digital Currency Group based on what its GBTC documentation may reveal.
Follow up
Grayscale Investments has reached an agreement with New York-based investment firm Fir Tree Capital Management over its Bitcoin Trust.
According to a July 11 announcement from Fir Tree, Grayscale agreed to provide additional documentation related to its Bitcoin Trust (GBTC) after Fir Tree filed a lawsuit in December 2022. The complaint against Grayscale aimed at having the asset manager stop plans to turn its GBTC trust into a spot exchange-traded fund (ETF) and provide documentation on its relationship with Digital Currency Group, Grayscale’s parent company.
Fir Tree claimed that roughly 850,000 retail investors had been “harmed by Grayscale’s shareholder-unfriendly actions” based on the firm’s lack of a redemption program from GBTC into cash or crypto. In addition, its legal team said Grayscale attempting to launch a spot crypto ETF could “cost years of litigation, millions of dollars in legal fees, countless hours of lost management time, and goodwill with regulators.”
Related: Grayscale Bitcoin Trust nears 2023 highs on BlackRock ETF filing as buyers step up
“Once Grayscale provides Fir Tree with the GBTC documents that it has agreed to produce under this agreement, we will be able to further investigate Grayscale in order to determine our appropriate next steps, which may include filing additional litigation against Grayscale, Digital Currency Group (DCG), and their respective directors, officers, and advisors, or others who should be held accountable for destroying billions of dollars of GBTC’s market value,” said Fir Tree.
Grayscale filed a legal challenge against the United States Securities and Exchange Commission (SEC) in June 2022 after the regulator denied an application to convert its Bitcoin Trust into a spot Bitcoin (BTC) ETF. The lawsuit is ongoing, with the SEC having not approved any spot crypto investment vehicle despite applications pending from BlackRock and other investment firms.
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