Fir Tree also is looking for internal files about the alleged interdependency of Digital Currency Group’s businesses, which it said is “especially troubling given recent events in the crypto ecosystem, including the rapid collapse of FTX and Three Arrows Capital.”
The firm said it’s also concerned by the fund’s lack of independent oversight.
Fir Tree said it wants Grayscale to stop its efforts to convert the trust into an exchange-traded fund, which Grayscale claims is the only way it can legally redeem shares.
The US Securities and Exchange Commission refused to bless the conversion earlier this year, as it has for similar funds, and Grayscale is suing the regulator over the refusal.
“That strategy will likely cost years of litigation, millions of dollars in legal fees, countless hours of lost management time, and goodwill with regulators,” Fir Tree’s lawyers said in the complaint. “All the while, Grayscale will continue to collect fees from the trust’s dwindling assets.”
--With assistance from Katie Greifeld.
This article was provided by Bloomberg News.