Fir Tree Capital Management has filed a suit against Grayscale Investments demanding information that may be accustomed to pressure changes to the actual way it runs its flagship Bitcoin Trust.
According to Bloomberg, a 12 ,. 6 complaint was filed against Grayscale in the Delaware Court of Chancery and seeks to possess Grayscale lower its charges, start redemptions and give documents associated with its relationship using the Digital Currency Group.
The hedge fund also really wants to stop Grayscale’s efforts in converting its $10.7 billion Grayscale Bitcoin Trust (GBTC) right into a place exchange-traded fund (ETF).
In the complaint, the brand new You are able to-based hedge fund stated that around 850,000 retail investors have been “harmed by Grayscale’s shareholder-unfriendly actions.”
Shares in Grayscale’s Bitcoin trust presently trade in a near record 43% discount towards the Internet Asset Value (NAV) of their underlying digital asset, Bitcoin, according to data from Ycharts.
A lot of this is because because of the fact that GBTC holders have virtually no way to exit their GBTC positions, except to market these to another market participant as it doesn’t provide a redemption program into fiat or crypto.
Fir Tree alleges Grayscale’s redemption bar, which goes back to 2014, is “self-enforced,” and claims Grayscale is refusing to redeem shares as that will reduce profits.
The firm also wants Grayscale to prevent attempting to convert the trust into an ETF so it has attempted to complete frequently over several years with no success.
“That strategy will probably cost many years of litigation, huge amount of money in legal charges, numerous hrs of lost management time, and goodwill with regulators,” Fir Tree’s lawyers stated within the complaint. “All the while, Grayscale continuously collect charges in the trust’s dwindling assets.”
However, Grayscale has maintained the funds’ conversion into an ETF is exactly what will let it create and redeem shares.
A Grayscale spokesperson told Cointelegraph it’s always planned to transform the GBTC into an ETF when allowed by U . s . States regulators.
“We remain 100% dedicated to converting GBTC for an ETF, once we strongly believe this is actually the best lengthy-term product structure for GBTC and it is shareholders.”
“At Grayscale, our mission would be to help investors connect to the ever-evolving crypto ecosystem through familiar, secure, and transparent investment vehicles. We respect the views in our shareholders, and appreciate engaging directly together around the information on our product structures and operating model.”
The gap between GBTC shares and Bitcoin elevated to almost 50% within the days following the collapse from the now-bankrupt crypto exchange FTX.
Shares in GBTC happen to be progressively declining for several months since its peak position of $51.47 per share on November. 12, 2021, using the cost per share standing at $8.76 during the time of writing, according to Yahoo Finance.