The collapse of SBF’s crypto exchange FTX, and the sister company run by his former girlfriend Caroline Ellison, Alameda, made for one of the most ridiculous high-profile collapses of the entirety of 2022.
Now, the problems faced by the Digital Currency Group has raised further concerns, as Alameda is now trying to recuperate assets from DCG for their creditors.
Alameda sues Grayscale and DCG to enable redemptions
Alameda believes that DCG holds over $250m worth of their clients’ funds, and that they ought to be able to retrieve these assets.
In addition to the claims made against Grayscale and the Digital Currency Group, Alameda also filed claims against the CEO of Grayscale Michael Sonnenshein and the CEO of DCG, Barry Silbert.
7) A successful outcome for John Ray makes the DCG convertible note much less attractive
The analysis above tells me a clawback for the $2.3bn Alameda / FTX loan is unlikely. John Ray is playing for ~$200M upside while potentially reducing $500M+ of value to Genesis Creditors
— Felipe Montealegre (@TheiaResearch) March 6, 2023
According to the complaint by Alameda, Grayscale has been extracting exorbitant management fees from their Bitcoin and Ethereum trusts, and has allowed the trusts to trade at over 50% discount to NAV, which they believe to be unacceptable.
There has been a lot of controversy surrounding the way in which the Grayscale funds are structured over the course of the last few years, particularly thanks to the fact that the SEC has repeatedly refuses to allow the funds to convert into an ETF.
John J. Ray III is determined to pursue the assets for FTX creditors
John J. Ray III, the infamous specialist in restructuring bankrupt companies that became notorious after taking over Enron after the disaster there, has made it clear that he intends to claw back as much as he possibly can from DCG.
However, it seems highly unlikely that he will be able to succeed in this endeavour, particularly when one considers the fact that Grayscale’s BTC and ETH funds are currently trading at such a large discount relative to NAV.
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