Alameda looks to rally up co-plaintiffs in case against Grayscale

More than 45 individuals, funds and family offices “have already indicated they are willing to participate,” FTX debtor affiliate claims


Castleski/Shutterstock modified by Blockworks


The crypto hedge fund founded by Sam Bankman-Fried says it’s in the process of assembling more plaintiffs to join the firm in its suit against Grayscale Investments. 

Alameda Research — a debtor affiliate of crypto exchange FTX, which filed for bankruptcy last November — sued Grayscale, Digital Currency Group (DCG) and DCG CEO Barry Silbert in March. It claimed at the time that Grayscale’s fee structure and redemption ban on its bitcoin (BTC) and ethereum (ETH) trusts had lowered the value of Alameda’s shares by 90%.

Alameda said in an August 2 motion to the Delaware Chancery Court that more than 45 parties, including individuals, funds and family offices “have already indicated they are willing to participate as additional plaintiffs.”

These individuals and entities were not named in the document.

Law firms Quinn Emanual Urquhart & Sullivan and Abrams & Bayliss, which represent Alameda in this case, did not immediately return a request for comment.  

But Alameda requires more time “to continue to assemble plaintiffs to participate alongside it,” the motion adds. The court is giving the plaintiff until Sept. 15 to respond to Grayscale’s motion to dismiss.

The lawsuit is “entirely without merit,” a Grayscale spokesperson told Blockworks Thursday, declining to comment further.  

Alameda said the shares of the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) were trading at a discount of roughly 50% when it filed the lawsuit — a price about half the value of the bitcoin and ether backing them.

That resulted in a loss in market capitalization of about $9 billion for the two trusts for investors, the FTX debtor said in its March 6 complaint

“For the Alameda debtor alone, the discount equates to a loss in the market value of its holdings in the Trusts of over $250 million,” it added.

GBTC was trading at a discount of 25.8% to its net asset value on Wednesday, according to, while the discount of ETHE stood at roughly 34.2%.  

In need of more plaintiffs

The suit came about five months after the collapse of FTX, which, like Alameda Research, was founded by Bankman-Fried. The former FTX CEO was originally charged with wire fraud, conspiracy to commit securities fraud, and other charges in an eight-count indictment — to which he pleaded not guilty

Read more: US prosecutors drop campaign finance charges against SBF

John J. Ray III, which now serves as FTX’s CEO and chief restructuring officer, said in a March statement that it would “use every tool we can to maximize recoveries for FTX customers and creditors.”

Alameda’s effort to assemble more plaintiffs follows Grayscale’s motion to dismiss the case in May. 

Grayscale argued that certain claims relating to sponsor fees would only be permitted under the trust agreements if brought by at least two unaffiliated shareholders who jointly own at least 10% of the trusts’ outstanding shares, Bloomberg Intelligence litigation analyst Negisa Balluku said in a Thursday research note. 

An unnamed “significant shareholder” of the Grayscale trusts expected to be an additional plaintiff backed out of joining the litigation on July 31, it said in the Aug. 2 document — leaving Alameda short of the 10% shareholder support. 

“Even if Alameda eventually secures the necessary shareholder support, its attempt to unlock about $9 billion through a reduction of fees and implementation of a redemption program may still face dismissal,” Balluku wrote.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit