New York-based hedge fund Fir Tree Capital Management is suing Grayscale Investments in a bid to secure access to information that could be used to force changes in the way the firm runs its $10.7 billion flagship Bitcoin Trust fund, according to a report by Bloomberg.
Fir Tree filed a law suit against Greyscale on 6 December at the Delaware Court of Chancery in a bid to force Grayscale to lower its fees, begin stock redemptions and hand over documents relating to its relationship with the Digital Currency Group.
The hedge fund also wants Grayscale to halt its efforts to convert the Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). GBTC closed on Monday at a 43% discount to the value of the bitcoin it holds, with the trust’s publicly traded shares having sunk by around 75% this year on the back of wider disruption in the cryptocurrency space stemming from the collapse of Sam Bankman-Fried’s crypto exchange FTX.
The report cites unnamed sources as saying that Fir Tree, which manages around $3 billion, wants Greyscale to ease the discount by lowering fees and reselling redemptions. In its complaint, the hedge fund said that around 850,000 retail investors had been “harmed by Grayscale’s shareholder-unfriendly actions.”
Greyscale currently does not offer a redemption programme into either fiat or cryptocurrency for GBTC shareholders. It also charges fees of 2% – higher than rival funds – on the market value of its bitcoin holdings rather than the lower market price of the GBTC shares.
Grayscale is owned by Barry Silbert’s Digital Currency Group, which also runs Genesis Global Trading, a crypto lender and broker that halted withdrawals in November.
